Reaffirmation Agreement in Bankruptcy
Reaffirmation Agreements in Bankruptcy
It is typically a bad idea to sign a reaffirmation agreement after filing for bankruptcy protection. In most instances the secured creditor will allow you to keep the collateral (typically a home or car) if the payments are kept current. The most inconvenience most people will face if they do not sign a reaffirmation agreement is the lender will not allow online payments and may not report the payment information to the credit bureaus until after the bankruptcy is completed. If you decide to sign a reaffirmation agreement you must be aware that if the lender forecloses or repossess the collateral they can and usually will get a deficiency balance for the amount owed after the collateral is sold. If you do not sign the reaffirmation agreement and the collateral is taken back, then you will not have any deficiency balance after the collateral is sold.
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