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Do I Have To Pay For Stuff I Don’t Keep In Bankruptcy?

There seem to be two schools of thought regarding bankruptcy and what it means for your property. On the one hand there is the thought that you can file bankruptcy and keep your property without paying for it, and on the other hand there are those that think you have to give all of your stuff back and still pay part of the bill. Neither of these two theories is correct, and the truth about bankruptcy is much easier to swallow.

When you file for bankruptcy you will have to decide what to do with certain pieces of property. With things like your house and car, you will need to declare your intent as either surrender, redeem, or reaffirm. If you decide to surrender something that means you are agreeing to give it back to the lender, and any balance owed will be eliminated. You will not have to pay for something that you no longer have, but you will have to pay for things where you state your intention is to redeem or reaffirm. Reaffirming a debt is the most common way to hang on to your property while still making payments and it requires you to sign a reaffirmation agreement. A reaffirmation agreement is like a brand new contract for the debt, and you remain responsible for making the payments even after your case is over. Because the purpose of bankruptcy is to get rid of debt, you might be wondering why anyone would agree to reaffirm. Here are the most common reasons given for reaffirming a debt:

  • The lender might agree to reduce the interest rate, and this means a lower payment.
  • You may need the lender to still be able to work with you in the future, on this debt or for future advances. Without a reaffirmation agreement in place, the lender is prohibited from talking to you about the debt after the case is over. But, if you reaffirm, the creditor is allowed to communicate with you about the debt.

Deciding what to give back, so you can eliminate a payment and free up money for other things, and deciding what to keep in bankruptcy can be hard. We can help. Call us today.

For more information about reaffirmations and for help deciding what to give up and what to keep in bankruptcy, contact us at

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