Tag Archives: Surrender

What are Alternatives to Reaffirmation?

Despite the public perception that Chapter 7 bankruptcy involves losing everything, the reality is far less negative. Firstly, bankruptcy is a sign of improving one’s financial standing and credit history, not going down the hole. Second, a person filing for bankruptcy does not necessarily have to lose all of their assets—in fact, in most Chapter 7 bankruptcies, this does not happen at all. If you file Chapter 7, you can decide to reaffirm certain assets and their associated debts in order to keep the asset. This is most commonly done with automobiles. Reaffirmation consists of a contract between a debtor and lender permitting the former to assume responsibility for an asset and its associated debt. Usually, debtors reaffirm assets pledged as loan collateral, such as motor vehicles. The decision to reaffirm an asset is made at a reaffirmation hearing. The debtor appears before a judge who must ensure that the…
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