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Filing for bankruptcy may be the ideal solution if you’re facing a mountain of debt you can’t seem to escape. This will give you the opportunity to start fresh and enjoy financial freedom once again. However, before submitting your petition, you must decide whether you wish to reaffirm any secured debts you have.

What Does Reaffirmation Mean?

When you file a Chapter 7 to eliminate your debts completely, you may have to give up some of your property as well, unless you sign a reaffirmation agreement. This means you can keep items like your car or house as long as you promise to continue paying on the loan instead of releasing it in your bankruptcy.

This is an importantfiling for bankruptcy decision to make, as it means you will still be responsible for making payments to your mortgage or car lender. Since the purpose of filing for bankruptcy is to get rid of financial obligations you can’t afford to pay, it’s crucial to ensure you have the means to reaffirm before recommitting to the terms of your loan.

What Are the Advantages & Disadvantages?

Before filling out your Statement of Intentions, you should weigh the pros and cons of reaffirmation. The main advantage is you will get to keep your property and don’t have to worry about repossession. Also, as long as you keep up with your monthly payments, you can rebuild your credit much quicker. On the other hand, though, if you fall behind again, your lender has the right to repossess your property and sell it and still hold you accountable for the balance you owe.

 

The best way to determine if you should reaffirm debt is to discuss your specific case with an experienced bankruptcy attorney. They will help you assess the benefits and risks. For those interested in filing for bankruptcy in Farmington, CT, the legal team at Greene Law PC will provide support and guidance throughout the process. They have experience handling both Chapter 7 and 13 bankruptcies and will make sure you choose the most suitable option for your financial situation. Contact them today at (860) 676-1336, or visit their website to learn more.  

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