Reaffirmation Question

[jb300]

I want to make sure I understand this correctly. On my secured debt I can be asked if I want to reaffirm. I am not required to if I understand this right but as long as I continue to make my payments the creditor can't do anything is that right?

Then if I don't reaffirm, then if something happens down the road that I need to let the secured item go I am protected from the Chapter 7 BK correct?

Also I know the TT will look for things in my expenses to get moeny available to pay my creditors. Since the whole purpose of BK is to get a fresh start and free up some money one of the things I desperately need is medical insurance. I couldn't afford it and was hoping by doing BK to have some money available to get at least something in place.

If the TT objects to any of my expenses am I allowed to show them that I have new expenses that I need to take the place of the ones they exempt? I could be getting some quoates now for what a basic policy would cost for me and have it available should the need arise but am I allowed to say anything about it? If they ask my why I didn't put it on my sheet before I would say I couldn't afford it but do need it and was waiting for the BK to be completed to try and get it.

Thoughts....

[justbroke]

I want to make sure I understand this correctly. On my secured debt I can be asked if I want to reaffirm. I am not required to if I understand this right but as long as I continue to make my payments the creditor can't do anything is that right?

Yes. On your Statement of Intentions (SofI), you would indicate that you want to reaffirm. The lender will produce reaffirmation documents for you to sign and your lawyer to countersign and present to the court.

Then if I don't reaffirm, then if something happens down the road that I need to let the secured item go I am protected from the Chapter 7 BK correct?

Well.. in some Districts, it's that simple. However, in many Districts, the new Bankruptcy Code (BAPCPA of 2005) says that you MUST either re-affirm, surrender, or redeem the property. So, you can't technically do what they call a "ride-through". However, the "ride-through" (not reaffirming but still paying) seems to be alive in well in a good number of Districts.

Also I know the TT will look for things in my expenses to get moeny available to pay my creditors. Since the whole purpose of BK is to get a fresh start and free up some money one of the things I desperately need is medical insurance. I couldn't afford it and was hoping by doing BK to have some money available to get at least something in place.

The Trustee is looking for assets and property that you don't have any exemption for. The exemption protects it from the Trustee (and creditors). If there are no assets/property, then you are a no-asset case and really have no worries.

If the TT objects to any of my expenses am I allowed to show them that I have new expenses that I need to take the place of the ones they exempt?

Expenses don't work like exemptions. Exemptions cover property... while expenses are costs associated with maintaining a household, working, living, etc. So, much of this is controlled by the Bankruptcy Code, IRS Standards, and local rules.

I could be getting some quoates now for what a basic policy would cost for me and have it available should the need arise but am I allowed to say anything about it?

Are you talking about insurance policies? You may want to work on this with your lawyer. New expenses are generally looked at more closely. Unless you are under median, they are looked at for a reason. The reason is that borderline debtors who want their Chapter 7 and don't want a Chapter 13, will pad the Schedules with expenses (even "legitimate" new expenses) to pass the means test.

[jb300]

I am under median by 7000, I am no assets. I have no medical insurance, period. I am self employed and need to get insurance just haven't been able to afford it.

Ok that helps me to understand this better so I know what is going on if it comes up at the 341. I will be so glad to get June 5th here.

[justbroke]

I am under median by 7000, I am no assets. I have no medical insurance, period. I am self employed and need to get insurance just haven't been able to afford it.

Ahh... Medical Insurance. that makes a difference! Yes, you need that and that's definitely a necessary expense.

[LuciluS]

O Me, after 7 surgeries since 5/1/05, I'm so thankful for health insurance. Now, I'm disabled and on Medicare which isn't the greatest, but will live with it. I have a supplemental policy for my prescriptions.

Try to get the medical insurance before your 341, if you can. You need it anyway & If an expense is questioned you will have this expense to help. I just cannot imagine a Trustee disallowing health insurance.

Luci