When Does a Reaffirmation Agreement Have to Be Filed?

If you`re considering filing for bankruptcy, you may have heard the term „reaffirmation agreement“ thrown around. Essentially, a reaffirmation agreement is a legally binding contract between you and a creditor that allows you to keep certain secured property (such as a car or a home) and continue making payments on it even after your bankruptcy case is closed.

But when does a reaffirmation agreement have to be filed? Here`s what you need to know.

First, it`s important to understand that reaffirmation agreements are not required in all bankruptcy cases. In fact, in many cases, it may not be necessary or even advisable to enter into a reaffirmation agreement at all. This is because when you file for bankruptcy, certain types of debt (such as credit card debt and medical bills) are typically discharged (or wiped out) completely, meaning you are no longer responsible for paying them back.

However, if you have secured debt (such as a car loan or a mortgage), you may be able to keep the property by signing a reaffirmation agreement. This agreement essentially re-establishes your obligation to pay the debt, despite your bankruptcy filing.

So, when does this agreement have to be filed? In most cases, you will need to file your reaffirmation agreement with the court before your bankruptcy case is closed. This typically means within 60 days after your creditors` meeting (also known as a 341 meeting), which is a meeting that takes place between you, your creditors, and the bankruptcy trustee assigned to your case.

It`s important to note that you will need to have a valid reaffirmation agreement in place in order to keep your secured property. If you fail to file the agreement on time, or if it is not approved by the court, your creditor may be able to repossess the property or foreclose on your home.

In some cases, your bankruptcy attorney may advise against signing a reaffirmation agreement, even if you want to keep the property. This may be because the debt is too high or because you cannot afford the payments. In these cases, it may be better to surrender the property and discharge the debt, rather than enter into a binding agreement that could put you at risk later on.

In conclusion, a reaffirmation agreement is a legal contract that can help you keep secured property after a bankruptcy filing. It typically needs to be filed within 60 days after the creditors` meeting, and it`s important to have a valid agreement in place to avoid losing your property. However, entering into a reaffirmation agreement is not always necessary or advisable, so it`s best to consult with a bankruptcy attorney to determine the best course of action for your individual situation.