A Reaffirmation Agreement is a contract that was presented by one of your creditors that you and your attorney sign after your bankruptcy petition has been filed with the court. The legal effect of signing the Reaffirmation Agreement is that the personal liability that was released from you, by way of filing for filing for bankruptcy protection, reattaches to you.
For example, say you have a car loan that was listed in your bankruptcy petition. When your petition is filed with the court, the creditor can no longer sue you to collect on that car loan. Of course, the creditor could repossess the vehicle if you do not make timely monthly payments, but the creditor cannot sue you for the balance on the loan. This is a huge benefit of filing for bankruptcy protection! This benefit is extinguished if you sign a Reaffirmation Agreement, and that Agreement is filed with the court. Why? Because you signed (executed) and filed a post-filing contract, which reattaches liability to you. If your car gets repossessed after you sign the Reaffirmation Agreement, the creditor now has rights to sue you for the deficiency on your car loan.
Our take on Reaffirmation Agreements is they only benefit creditors, not you! Remember the goal of filing for bankruptcy protection is to get you a "fresh start." By signing (executing) a Reaffirmation Agreement, you are taking debt into your new financial life.
The lesson of all of this is --- consult with your attorney before you sign any contracts after you file for bankrutpcy protection.
Visit our website for more information about the benefits of filing for bankruptcy protection. www.vanwierenlaw.com
Van Wieren Law Firm, LLC - Atlanta Bankruptcy
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