How does reaffirmation agreement work?
Robert Harper 
If a debtor signs a reaffirmation agreement, the debtor agrees to pay a debt that otherwise might be discharged in his or her bankruptcy case. Reaffirming a debt imposes ongoing obligations on a debtor to make payments and may have significant financial consequences.
How long before creditors get repossessed?
Limitations on debt collection by state
| State | Written contracts | Oral contracts |
|---|---|---|
| California | 4 years | 2 years |
| Colorado | 6 years | 6 years |
| Connecticut | 6 years | 3 years |
| Delaware | 3 years | 3 years |
How can I get out of a reaffirmation agreement?
To cancel a reaffirmation agreement, you must notify the creditor. It is a good idea to notify the creditor in writing via certified mail with a return receipt postcard so you have proof that you have rescinded the agreement.
What is a reaffirmation agreement in a Chapter 7?
When you reaffirm a debt you essentially sign a new agreement that makes you personally liable on that loan again. This means that you are foregoing the benefit of your bankruptcy discharge on the reaffirmed debt. Reaffirming a debt should not taken lightly.
What happens if I do not sign a reaffirmation agreement?
If you don’t sign a reaffirmation agreement, the lender can repossess your car after your case closes and the automatic stay lifts. Some car lenders are known to repossess the car immediately, even if you are current on payments.
What happens if you don’t sign a reaffirmation agreement?
What happens if you miss three payments on a car?
Legal action is generally taken once a client misses three payments. If your vehicle does get repossessed it is usually sold through an auction where vehicles often sell for a fraction of their resale value. If this happens, you will owe the difference.
Do you have to be current on a reaffirmation agreement?
Before you can enter into a reaffirmation agreement, you’ll need to be current on the loan. Also, you must be able to protect all of the equity in the property with a bankruptcy exemption.
What happens if I refinance my car loan?
Even if you can’t find a more favorable rate, you may be able to find another loan with a longer repayment period, which might also result in a lower monthly payment (although it might increase your total interest cost over the life of the loan).
What happens when you take out a used car loan?
When you purchase a new or used car or take on a lease, the assumption is that you’ll drive it for many years. But what happens if you need to get out of your loan? Maybe you weren’t the smartest shopper when you took out a new loan for a car, or you have suffered a significant change to your financial situation.
