Reaffirmation in Chapter 7: Why all the Confusion? A Real Life Reaffirmation Legal Primer
Debtors who reaffirm may be misled by the creditors or opposing parties, even regulators/bar counsel who have never helped anyone or ever filed a case. Learn the ins and outs of reaffirmations, which since 2005 have become a source of confusion; yet still aren't worth the paper they are written on
Your options to keep Assets are Real and Many! So RelaxRelax all especially debtors, Chapter 13 is still available to you if reaffirm or not. Reaffirming is not why debtors file bankruptcy. They file to get rid of debts. If they reaffirm they are keeping debt. Don't and they will likely have their cake and eat it too. Lender's hate debtors who won't reaffirm. Most smart creditors know that the cost of a reaf is not worth the paper it is written on. These of course are generalization and should not be taken as legal advice for every situation. DISCLAIMER: SEEK LEGAL ADVICE AS TO YOUR PARTICULAR SITUATION
Debtors may be able to voluntarily reaffirm, redeem with a court order, surrender under the code, but often the best is do nothing and pay and drive or pay and live in the home. "Possession is 9/10ths the law" or ownership. Sure a tow truck could take your car, but then you file a 13 and teach the creditor a lesson, right? Foreclosure on a home is easy, cheap or fast and debtors have so many options and can live rent free if they are willing to risk moving out or are upside down on the debt. 50 percent of homeowners my actually still owe more on their homes than they are worth in parts of the United States and country with a history of ghost towns after economic changes leaves homeowners without the means to pay.
So, if reaffs are usually a bad mistake for debtors to sign, why the confusion?Lenders cause some of it. Untrusting or uninformed or misinformed debtors cause some of it, But the true source of consternation comes from the fact that when the note is discharged and liens on the property, personal or real, remain, the creditors can't or won't, but don't report the the Credit Bureaus, like Transunion, Experian, or Equifax when debtors in possession post bankruptcy continue their payments.
See once again the problem is government. The Congress or courts have not protected the people in the FCRA. That means the Fair Credit Reporting Act. If Congress calls it fair, what do you think? Do you think it's fair? Was the Affordable Care Act affordable? So Debtors get over that your bank won't report and help you rebuild your credit. They won't and or can't or don't. That is not your attorney's fault. You got out of debt under the BAPCPA or Bankruptcy Code, and did not hire your bankruptcy to address your credit score issues which you caused by not paying bills timely.
The value of discharge is great, but happy you beat the system legally and for a fraction of the cost of what most repay to creditors. America is run by children for children. Time we all grow up and worship God and not money or power. Best wishes for happy, prosperous and honest future.