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An agreement between a creditor and a debtor agreeing to be liable and continue to pay money owed even after a bankruptcy proceeding has concluded is known as reaffirmation. Usually, you do not want to reaffirm an old debt, especially in bankruptcy.
Despite this, creditors encourage reaffirmation before and during a bankruptcy because they know that is the best way to have you pay off the debt once a bankruptcy proceeding has concluded.
That means that even when a debt could be fully dischargeable, if you reaffirm it you will walk away from a bankruptcy still owing it.
It does not make sense to reaffirm most debts. The main exception to that is an auto loan. Since most people need their cars to get to work and get around, in some situations is may make sense to reaffirm n auto loan to keep your car. First, you should look up if your automaker requires a reaffirmation, as not all do.
There is an upside. If you do reaffirm a debt and maintain a good payment history on it, you may be able to rebuild your credit history faster after bankruptcy.
If after bankruptcy a creditor calls you about one of your discharged debts, do not speak with them, but you should contact your lawyer.
A debt must be reaffirmed BEFORE a discharge is entered. A court needs to approve a reaffirmation unless an attorney represents a client. In that case, an attorney must certify the debtor knows of all the terms and the client is both fully informed and made the agreement freely.
It is crucial to know that in some states, admitting a debt in writing or by phone may reset the statute of limitations on forced collections. It is important to know how to protect yourself. Make sure to contact Westbrook Law Group for help. We will fight on your behalf and represent your best interests.