If you are in the midst of filing for bankruptcy and are afraid of losing your car or other piece of personal property due to non-payment, entering into a reaffirmation agreement may seem like a smart move.
A reaffirmation agreement can enable you to retain possession of your car, house or other piece of personal property in exchange for a promise to your loan provider that you will continue to make payments on a debt that may have otherwise been eligible for discharge under bankruptcy protections.
However, reaffirming the debt may not be in your best interests. There could be other options available to you that would enable you to keep your car without reaffirming your current loan. A qualified bankruptcy attorney may be able to help ease your financial situation without causing you to lose your property by coming up with additional solutions, such as negotiating a reduced payment plan for you with your provider.
If you chose to reaffirm your current loan as is, it is possible that you will be unable to continue meeting your payment obligations in the future, even after a majority of your debts are discharged through bankruptcy. In that case, you could find yourself facing repossession or foreclosure again in just a few short months.
Talking your situation over with a qualified bankruptcy attorney is your best chance to better your financial situation while meeting your goal of keeping your car or house.
If you have questions about filing for bankruptcy or whether or not to sign a reaffirmation, contact a bankruptcy attorney in your jurisdiction.