Richard Stokan from our office recently wrote an interesting post here about the practical aspects of negotiating reaffirmation agreements.  In short, a reaffirmation agreement is a new contract signed between the debtor and a lender that reaffirms the debtor’s personal liability for a debt (typically an automobile or home).  This agreement essentially states that the debtor will continue to pay all or part of the debt obligation (depending upon what is negotiated) to t

Often, consumers who wish to keep automobiles through a bankruptcy proceeding are required to reaffirm the debt. Remember that a bankruptcy wipes out your personal obligations to pay debt. In order to keep a financed car, many states require reaffirmation. A debtor must be certain he or she can afford to make the required payments before agreeing to reaffirm because a reaffimed debt will survive the bankruptcy. Further, the Bankruptcy Court will not approve the reaffirmation agreement if it will result in a financial burden.

Bankruptcy clients typically want to keep their transportation and are willing to ignore the advice of their attorneys about not signing a reaffirmation agreement. Thankfully, some bankruptcy judges are willing to protect the debtors from themselves and have ruled that the reaffirmation agreements presented will not be allowed. The debtors are told to keep current on their payments and they will be able to keep the vehicle.

A discharge in bankruptcy “wipes the slate clean” by legally relieving the debtor off all obligation to pay certain debts. Remember that if you wish to retain property like a car or home, payments must be made after bankruptcy. The bankrupty discharge is mosy effective at eliminating credit card debt, medical bills and old tax obligations.

As I have discussed here and on my firm’s website, the U.S.

Chapter 7 bankruptcy debtors often own cars subject to a car loan and lien. The new bankruptcy law states that debtors must reaffirm loans on all personal property in order to maintain the property through their Chapter 7 bankruptcy. So,...

Yes, you read that correctly.  Debit audits are officially back as of May 12, 2008.  This is despite the fact that the panel trustee already examines the debtor, and despite the fact that the U.S. Trustee already reviews every petition filed with the Clerk.  The new notice from the office of the U.S. Trustee, dated May 9, 2008, clearly states that the U.S. Trustee will resume debtor audits.