Can You Keep Your House and Cars After Filing for Bankruptcy?
Yes. A reaffirmation agreement is simply a contract that is entered into by both the individual filing for protection under the bankruptcy code and the creditor after the bankruptcy is filed. Once you file a bankruptcy, you are no longer personally liable on the secured debt. However, the mortgagee bank on your house or the creditor who holds the note on your automobile will want some security that you want to be personally liable on the note and to know your intentions with respect to whether or not you intend to pay for the vehicle or house. So they will forward to our office a reaffirmation agreement, which we will discuss at length with you.
The reaffirmation agreement essentially says "OK secured creditor, I know I do not owe you on my (house, car) because I am no longer personally liable. However, even though I filed a bankruptcy and I am no longer personally liable on that car or house, I wish to incur personal liability and reaffirm my obligation to you. Therefore, I will continue to make the payments and reaffirm that I am obligated on this car or house because I want to pay for it and I want to keep it."
At Pelley Law Office, L.L.P. we have extensive experience handling bankruptcy cases for clients throughout North Texas. We can answer any questions you have about reaffirmation agreements and other bankruptcy law issues at our free initial consultation.
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If you owe money on a car and file a Chapter 7 bankruptcy, then your lender will likely send you a reaffirmation agreement. As long as you execute the reaffirmation agreement and continue to timely make payments on the car note, you will get the title at the end of the note. If you choose not to sign the reaffirmation agreement, then you can surrender the car and the debt should be discharged. That is the benefit of filing a Chapter 7 or Chapter 13 bankruptcy. Typically, you can treat your secured creditors and the collateral that they have to secure that loan how you wish. If you wish to keep the car or house, then you must pay for it. If you wish to surrender the car or house, then you will not be sued on any deficiency after a repossession or foreclosure.
Of course, it is prudent to sign the agreement only if it is financially feasible for you to keep up with the car payments. Our experienced attorneys can help you forecast how bankruptcy will affect your overall financial picture and your ability to make monthly car payments. You may have to demonstrate to the court that you are able to keep up with your payments on the car, but that is very rare. Our attorneys can represent you in these matters and guide you through all aspects of the bankruptcy process.
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Pelley Law Office, L.L.P. is recognized as a leader in the bankruptcy law arena. We have helped thousands of clients file for bankruptcy protection since 1974. Contact us today to speak with one of our experienced Texas bankruptcy lawyer. We will explain your options, and you will be under no obligation to hire us.
Pelley Law Office, L.L.P. has been named by The United States Congress in Washington, D.C. as a debt relief law firm and we help people file for bankruptcy relief under the Bankruptcy Code.
