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Reaffirmations allow you to keep property by owing the bank the amount of the original loan.  However the bank can then sue for a deficiency if they repossess the property later. 

In Bankruptcy, a reaffirmation  is an agreement that you file saying that you will pay a debt although you listed it in your bankruptcy.  If you want to keep a car or home worth more than it's lien, then you may want to reaffirm a secured loan.   By paying on debts on time after you file bankruptcy you will reestablish credit.   Reaffirmations allow you to keep property that is secured although you file bankruptcy.  Reaffirmation is a good option in bankruptcy if your car is worth keeping.   If not, now is the time to exchange it!  However Reaffirmations also allow the bank to repossess the car immediately and to sue you for the balance.   You have 3 options with your car or home if you file a bankruptcy: 

1) If your car is unreliable and you owe too much you can surrender your car or home in bankruptcy and owe nothing, which is a good way to get rid of a lemon.  However, then you need another car or home. 

2) If you bought a good car or a good house for a good price and a good interest rate you can keep it by reaffirming the debt and paying the lender as if you have never bankrupted that creditor or 

3)  You can file a redemption and pay the wholesale price for the auto or item if you owe too much.   

Often the bank offering a reaffirmation may add attorney fees to the loan if you file a reaffirmation.   If you paid too much for your car you should file a redemption or surrender it.   722 Redemption may save you money. (1-888-721-2800)   They may be able to put you into a different car or pay off your current bank for the wholesale (replacement after 10-2005) value of your car if you owe your present bank more than what it is worth.  See how to file a redemption in our manual under redemptions.

The Bankruptcy Manual fully discusses redemptions and reaffirmations.   Download your free copy. The Bankruptcy manual is for informational purposes only. The Bankruptcy Manual comes in rtf format for word or WordPerfect, pdf for adobe, or you can download the audios.

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