You may be hesitant to file the bankruptcy petition you so desperately need to declare because you do not want to turn your and your family members’ lives upside down. That is, you may not want this to prompt the New York State Bankruptcy Court to take over your family home and automobiles, along with other drastic actions. However, you may rest a little easier knowing that you may qualify to enter into a reaffirmation agreement. So, without further ado, please continue reading to learn more about a reaffirmation agreement and how an experienced Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you execute one properly.
What is a reaffirmation agreement in bankruptcy?
In its simplest terms, a reaffirmation agreement is a voluntary legal agreement that allows you to pay some or all of what you owe on a specific account instead of requesting to cancel it. Such “specific accounts” may be considered secured debts that use a tangible asset as collateral. This is because, evidently, you may want to maintain possession of such assets, rather than giving them up as a consequence of your bankruptcy declaration.
For example, say you have outstanding payments on your car loan. Then, say you file for a Chapter 7 bankruptcy. Well, usually, this bankruptcy type will have you surrender your car to its lender so that you may no longer be financially obligated to your car loan. However, if you establish a reaffirmation agreement, you may keep your car all while promising to repay some or all of your remaining payments. Therefore, you should only explore this option if you are confident you can continually make timely payments on your car loan, especially considering your currently dire financial situation.
What can I do to execute a reaffirmation agreement?
If you wish to execute a reaffirmation agreement during your Chapter 7 bankruptcy proceedings, you must fill out and submit a Statement of Intent with the New York State Bankruptcy Court. Then, you must contact the lenders of the specific accounts you wish to keep open and negotiate terms and conditions for a repayment plan.
Importantly, you must file this legal agreement within 60 days of the date of your Chapter 7 bankruptcy’s mandatory meeting of creditors. The creditors must then approve this proposed agreement. Lastly, you must determine whether you change your mind and wish to rescind this agreement within 60 days from your Chapter 7 bankruptcy filing date or discharge date, whichever date is later.
If you still have doubts about how to proceed, please consult a skilled Rockland County bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq., P.C. will point you in the right direction.
