Reaffirmation Agreement in Bankruptcy. What Is It?

A reaffirmation agreement in bankruptcy is a new contract signed between you and a lender that reaffirms your debt and personal liability for the obligation. Such an agreement is usually executed for secure property such as an automobile, a boat, a recreational vehicle (such as a motor home) or an airplane. Before signing an agreement of this type, it is a good idea to have it checked over by your attorney as it is a binding legal document. The reaffirmation agreement must also be approved by the court. You can revoke it within 60 days after signing.

When must a reaffirmation agreement be signed?

The Bankruptcy Reform Act of 2005 states that any reaffirmation agreement(s) must be entered into prior to the filing of a discharge in bankruptcy and before the debtor actually receives the many disclosures required from his creditor. The document must also be approved by the court and not rescinded by the debtor prior to the discharge being filed. The court can also refuse to sign the reaffirmation agreement if it is of the opinion that the debtor cannot afford the payments called for under its terms.

Some creditors believe that the new 2005 bankruptcy law requires that a debtor sign a reaffirmation agreement if they want to retain the vehicle. However § 524(c) states that any obligation must be ‘enforceable under applicable non-bankruptcy laws, whether or not such a debt is waived.” As a result, if the debtor is current on his payments, keeps his vehicle insured and still refuses to sign a reaffirmation agreement, there appears no default that is enforceable under non-bankruptcy laws. Moreover, most bankruptcy judges are anything but eager to sign such an agreement if the debtor can’t or doesn’t want to afford the extra payment. Neither would most attorneys. Thus, the smart debtor doesn’t sign a reaffirmation agreement unless it includes better terms on a new contract and he is certainly permitted to do so.

The best advice

As a debtor, there seems little risk in signing a reaffirmation agreement provided that you feel you really need the property (such as a car to get you to and from a job) and unless you know you can’t afford the payment. Nevertheless, you have nothing to lose if you try to renegotiate your contract before you sign and don’t forget that if you’ve had the property for some time, its current value is less. The lender will very likely go along with your suggestions because it is to his advantage financially.

In the end, whether or not you sign a reaffirmation agreement comes down to how badly you want the property and whether or not you can afford to continue the monthly payments. If you need the property and the money is there, go ahead and sign. If not, let the property go and start over to rebuild your financial status with a really clean slate. Only you can make an informed decision.

You should try to avoid Bankruptcy at all costs!

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  • Cliff Pape

    Great post so many people do not understand what this means and just sign. This post will be a helpful tool to forward to on the countless questions I see about reaffirmation.

  • ss

    what if i signed and i thought i was signing because i was agreeing to continue to pay… for the mtg… i mean since i wanted to stay there, i thought i had to… its filed with the court, but the mtg company has never acknowledged it. on my statement, it says i am protected under bk and that htey are only excercising their right against the property. is it possible the mtg company never to the statement back? how does this work.. i cannot afford the home and i have to walk

  • lh

    will someone tell me how do reaffirmation agreement work with a mortgage. i am not pass do on it , but this never come up on court .. it has been over a year ,but the mtg.. company has never acknowledged it on my statement, it says this statement is for informational purposes only and is being provided as a courtesy should you voluntarily decide to makr your load payments. is it possible the mtg company or court never rec.. the agreement. how does this work and what can i do at this point. i can afford this home.

  • lh
  • TLK

    Help please, I signed a reaffirmation agreement (under Chapter 7 bankruptcy, 14 months ago) on my vehicle and now i can't afford it. If it goes back to the bank can they sue me for the difference after it's auctioned off?

  • Jayme

    My Chapter 7 was finalized on 01/2006. I signed a Reaffirmation Agreement to keep my car. I have never been late on the payments since I got the car. I ordered all three credit reports, and two out of three show the account status as being closed with a zero, or no balance. One of them shows the account as open and active with the current account balance. How is this affecting my score? Shouldn't they be showing as open and active since I'm still paying on the debt? Any good reporting on my records should be a good thing – should I dispute the record and state that it should be showing as open, active, and current??

  • Debbi

    I was supposed to sign a reaffirmatin on my vehicle and come to find out the lawyer did not have us do this. The bankruptcy is discharged and on the credit report it shows we filed it in the bankruptcy.However we have always paid on this loan and been on time, they tell us that we will get the title as usual when paid in full,but will not send any papers saying this. Is this something I should worry about or should I just tell them to come get the vehicle. On our credit report it shows we are paying on time,but also notes that it was included in the bankruptcy. Chase bank told us that they would not report this on the credit fil because it was included in the bankruptcy.Please help!

  • James

    To Jayme: To the credit report company that gave you the good new of showing as open, active and current; get two or three copies of this credit report, and send it to the other two most major credit report companies, TransUnion or Experian, Etc let them know of this so they can up-date their credit report record on you. Each time you get a notice that you cleared up something, send all three of these major credit report comancies a copy of your notice.

  • Dennis Morgan

    On november 09 my Bankrupcy case was discharge. My atterny did not send in my reaffirmation info. My mortgage company delayed everything needed to be done to this house, what can i do?

  • Denise

    I had a 3-year ARM mortgage which was 6.5% at first, then changed to 3.5% in January.

    When I signed my reaffirmation agreement in November 2008, it was still at 6.5%, as it was not scheduled to reset until January. I got my mortgage bill last week, which reflects the 6.5%. The mortgage company is telling me that when I signed my reaffirmation agreement, I promised to pay at the 6.5% and now I am locked in at that rate. This is a $400 difference. I am losing my job in June and cannot afford the 6.5% payment. Is the mortgage company lying to me about locking in at this rate? They are telling me that all I can do now is sell my house or refinance (can’t do that for 2 years now!). Pleaase help!

  • Donw

    I’m filling chapter 7. Lots of c.c debt, motor home etc. I met the means test for chapter 7. My attorney did all of this for me. Creditors meeting today, none showed up. Need to keep my 2 trucks because they are used for my business. Also wish to keep a boat. I am up to date on all of these payments, never been late. All 3 are worth less than I owe on them. My attorney tells me today the creditor on the boat is balking about signing the reaffirmation letter. I assume if they do not sign it then they take the boat?? Why would they want to do this as its worth at least $5,000 to $10,000 less than i owe on it. Its only 2 yrs old and they depreciate LOTS the first few yrs. Like I said, I’m up to date on payments, without all the other unsecured debt the payments on the boat are no problem. I could understand if it was worth MORE than I owe.

  • Laurie

    It is my understanding that if you DO sign the agreement, that from that point on you credit is to show closed with a Zero balance. It is not suppose to remain open or active with a current balace. So, one of the creditors has made a mistake, which only works in your favor. None of them should say ” open and active” because the agreement is made through the bankruptcy court, and the agreement means that from the day you sign it, it becomes a new agreement (a new loan). The old financing deal you made at the very beggining of purchasing the loan, becomes null and void. Also, if for some reason you should not be able to make your .payment from the time of signing the agreement, they will take the car and you will be responsible. It will not be picked up under the bankruptcy. There is no reason for you to dispute the record, because you will not win. In fact that may cause the third one to realize it’s mistake and change that one as well.

  • M. j. J. Viaros

    I filed a Chapter 7 bankruptcy in Florida 20 months ago and signed a reaffirmation agreement for an automobile with a credit union. The agreement was signed by both debtor( me) and creditor (credit union. I owed to the same credit union around 12,000.00 dollars in credit card debt which was discharged in the bankruptcy. The car was just paid off but the credit union doesn’t want to grant me title to the vehicle. They say I must satisfy the credit card debt. I said the reaffirmation agreement with them , signed at bankruptcy court with the judges approval, mandates title and sole ownership of the car to me when the lien is free and clear.

    Where do I stand?

  • Erin

    I lent about $2050 to a friend (married couple), they still owe me $950. We had a signed contract and almost a year later, they decided to file a chapter 7 and included this loan in it. I still have text messages that they still will pay me back and only included it in the loan so it would add to their debt. Can I do reaffirmation of this? There’s no physical property involved. But I did take out $1500 from my 401K to lend to them with 6% interest (and they know this)and $500 cash. Again, they still owe me $950. Is there any chance of me getting the rest of my money back? Or is it gone forever?!

  • Jan

    I have signed a reaffirmation agreement for two medical bills, I am not discharged yet, the medical facility has now turned it over to collections and they say that they can pursue the debt because it is not part of the bankruptcy. I thought that everthing was put on hold until the judge actually agrees to the reaffirmations and that they were not allowed to pursue any debt. They are trying to tell me it is not part of the bankruptcy because of the reaffirmation.

    Anyone have any ideas on this?

  • Renee

    I just had my bankruptcy hearing this past Tuesday everything went well I think. I now need to sign a reaffirmation agreement for my vechile I am really concerned because my step dad co-signed on my car and I do not want my bankruptcy to affect his credit. I need to know if it will and how it works. Please help, I need clear answers as I feel so confused right now!

  • Russ

    My car was repossed, by my creditor even thought I have never been late nor missed a payment.They said it was because I did not reaffirm the car.My attorney said I did not have to reaffirm and is working to get my car back. Its been a week now.Is this legal

  • http://[email protected] Bertha

    I my bankruptcy hearing is this Monday. I’m not sure what to expect. Before signing the reaffirmation, I called citifinanicial auto and asked to refinance the car. Lower payment by $100.00 and a lower interest to 12%. I’m confused. Who does the reaffirmation benefit? And what is the reaffirmation suppose to prevent?
    Thanks, Bertha

  • PKB

    I filed chapter 7 in December 2009. I need to reaffirm my vehicle for work, I contacted a attorney and he told me after owniubg a vehicle 2 1/2 years the creditor has to drop the loan down to blue book. Is this true? The bank just sent me paperwork and did not drop down one cent.

  • Willie

    I don’t want to sound stupid, but I had a vehicle loan with one bank in 2006 in Jan. 2007 I got a loan with another bank to lower the interest rate. Well, the first bank sent me the title clear and I never sent the title to the second bank. I continued to make the payments until a year ago and due to no work and c/cds I filed chapther 7. I was discharged this passed week and I still have the vehicle. No one has bother me or tried to repo it. I haven’t made a payment for 12 mths and I still have it. My question; is there anyway I can stop being worried that someday it will be repoed or is there something I can do to keep it from being repoed? The loan with the second bank was in the bankruptcy. Also at the day of the trustee meeting no one has claimed a dispute. Does this mean they have just wrote it off? I’m not sure on what to think.

  • casey

    I signed a reaffirmation agreement before my banjruptcy was discharged. The attorneys for the mortgage company said it didnot get there in time and had to go to court for me to get the reaffirmation enforced. In court and on the paper they said I signed a forbearance agreement. I didnot and have the proof to show, I am planning on filing in court as the mortgage company will not accept my payments because they said I signed a forbearance agreement. I plan on filing against the order that the attorney wrote any one have have any other ideas. I know I have to ask for a new court case anything else??

  • Brian Marks

    My Chapter 7 was completed in 2003. All of my debts were clear and I did not reaffirm my mortgage. I still live in the house and have been on time with payments however I may have to move because of work. Can I sale the house and pay the remaining loan off? I remember the attorney telling me I can just walk away if I do not want the home any loinger. I know my monthly statements say that the bank has the right to collect the property as collateral if I do not pay the monthly payment. Any help or suggestions would be helpful.


  • Ann

    I was divorced 4 years ago and my ex-husband is listed as the primary borrower on the mortgage. My ex filed for bankruptcy recently and I received a letter from the mortgage company notifying me of the filing. I’ve been paying for the home, on time for over 6 years and have never been late; my ex also filed a quit claim deed right after the divorce. The mortgage company advised me to seek council to get a reaffirmation letter. I’m not sure that I can do that since I’m not the one filing for bankruptcy. Any advice? Thank you

  • Thomas R. Morris

    I am writing solely to comment on the advice to “avoid bankruptcy at all costs.”

    That’s poor advice. You might save a life or defend your country “at all costs”. But bankruptcy, although serious, is just a legal proceeding.

    Instead, one should consider all costs of bankruptcy before resorting to it. It the benefits of bankruptcy outweigh the cost, then do it.

    Bankruptcy may be one of many options. Understand your options.

  • Susan Langland

    We just had our creditors meeting last Friday. Everything went very smoothly but when it was all over the attorney sitting in for our attorney gave us some paperwork (copies of tax returns and a reaffirmation agreement for our vehicle). Nothing was said about the agreement being in this paperwork and if I hadn’t decided to look at everything I would have never known it was there. My question is: Does this all go through the attorney and do I have the right to contact the loan company and renegotiate my loan before signing the agreement. I have not heard anything from the attorney about coming in to sign anything. Is it my responsibility to sign and send the agreement back to the loan company?

  • Susan Langland

    We just had our creditors meeting last Friday. Everything went very smoothly but when it was all over the attorney sitting in for our attorney gave us some paperwork (copies of tax returns and a reaffirmation agreement for our vehicle). Nothing was said about the agreement being in this paperwork and if I hadn’t decided to look at everything I would have never known it was there. My question is: Does this all go through the attorney and do I have the right to contact the loan company and renegotiate my loan before signing the agreement. I have not heard anything from the attorney about coming in to sign anything. Is it my responsibility to sign and send the agreement back to the loan company?

  • Rick

    Brian, I have the same question, were you able to find an answer?

  • Darrell

    To add to this I went to the Trustee’s meeting and everything went okay. The Bankrupcy papers said my car was exempt stating a Statute. I want to hold on to the car which was not a year old and had expected Reaffirmation papers to show up. I brought this matter up with my attorney but only after talking to the lender. The lender said I should have asked for Reaffirmation papers at the time the Bankrupcy was filed. The lender now tells me it is too late or to have my case reopened. My attorney is adament saying that very few lenders repo. Yet I read on here that lenders can and do repo cars that do not have Reaffirmation papers. All this talk is going in two different directions. I have to wonder is someone going to show up and repo my car even though I have never been late and current on my payments. Anyone got an answer?

  • Jennifer

    Hello! I was recently discharged! Howevery when I went to my hearing I told the judge I was going to reaffirm on my car loan from CNAC. (JDBYRIDER) They couple of days after I was thinking and decided not to and wanted to return the car and it was in my court papers I filed on them. I did not sign reaffirmation papers and I took the car back to JDByrider. They said they will send paper work they received it. Now I am getting paper work saying it was a volunteery repossession. It will go to auction and the remaining balance I will owe. What the Hell, I don’t think so!!!!!!!!!! I should not owe anything and be cut from that car and it should not be on my correct report showing repo! WHAT DO I DO? I have called and yelled and I get the run around. I have just called my lawyer and I am hoping this matter will be fixed by him.

  • Tanya

    We told our attorney to reaffirm our house and three vehicles in our chapter 7. It was discharged in 5/12/10. We never signed a formal refirmation agreement with the credit union where the cars are financed.
    Now we have decided to let one of the vehicles go back to the credit union, because it is in the shop more than we drive it, and it’s almost $15,000 upside down.
    We called the attorney and he said just park it in the driveway and tell them to come get it, and we will not be responsible for the remaining amount.
    We bought a brand new vehicle a couple days ago to replace it, but the dealer said the ‘other car’ wasn’t listed on our credit report as included in the bankruptcy. Now I’m nervous.
    I need to contact the credit union to come pick up the vehicle, but now I’m worried. It is true that we will be protected under the bankruptcy if we reaffirmed the debt but never signed a formal agreement with the lender?
    PLEASE HELP, any comments are appreciated!

  • Not a Lawyer

    The simple answer is yes. Once a reaffirmation is ratified by the court it becomes a binding contract and exists “outside” of the rest of the BK proceedings. The ‘reaffirmed’ property and liability is exempted from the discharge. That being the case, any default of a re-affirmed agreement after the discharge is unaffected by the protections a BK provides to a consumer. There is a ?60-90? day window after the discharge to cancel a reaffirmed contract, surrender the property, and have the debt included in the discharge by way of amending the discharge. I’m pretty sure, after a year, that you’re basically sh1t out of luck.

  • Not a Lawyer

    The creditor may repo their secured property, your vehicle, only if the Trustee allows them to. The Trustee will allow them to if;
    1) you fail to file a statement of intent regarding your vehicle in a timely manner 521(2)(A), or
    2) in your statement of intent you declare that you will surrender the vehicle, or
    3) in your Statement of Intent you declare that you will reaffirm but fail to file the reaffirmation within 30 days of the Meeting of the Creditors 521(2)(B), or
    4) the reaffirmation agreement is opposed by the creditor and the Trustee rejects it.

    You really need to have a long talk with your lawyer or fire his/her useless ass.

  • Not a Lawyer

    If your vehicles were NOT included in the discharge dated 5/12/10 then they were re-affirmed as far as the court is concerned. Re-affirmed property may be released to the creditor post discharge. There are two possible outcomes to this scenario;
    1) You get stuck with the bill, or
    2) The discharge is amended to include the surrendered property and associated debt.

    Option 2) is a limited option. There is a window (I’m thinking 60 days but I’m not sure) within which the reaffirmation agreement can be canceled and the property surrendered. Your BK attorney will know but, since you have received a discharge and this case is over, he is no longer your attorney and has no obligation to this case.

  • Susie

    I declared bankruptcy Chapter 7 in 2004 and choose to keep my mobile home/land and car. I never signed a reaffirm paper but DO have both of these listed on my “Chapter 7 Debtor’s statement of intention”. Is that the same as a “reaffirm”?
    I paid the car off years ago but I can no longer make the payment on the mobile home/land and want to let it go to forclosure but am afraid if they resell it I will owe them thousands in the price difference.
    (It is worth $13,000 and I still owe $40,000.)
    My bankruptcy lawyer no longer is practicing and she closed her office so I have no one to talk to. Thanks!

  • Cheryl

    We signed a reaffirmation agreement on our auto loan and have since decided to rescind the agreement. The bankruptcy has been discharged, but we are still within the 60 day time period to be able to rescind. In our letter stating we are rescinding the reaffirmation we also requested that our car payments made from the date of our bankruptcy be refunded to us. Is the finance company obligated by law to return that money to us? It amounts to $1350 and it sure would be nice to be able to recoup that.

  • What ????

    OK. I filled chap. 7 . All was discharged. Now when I call the Citi Financial Auto to start my payment they say I still ow the full amount or I have to pay the cram down total in full. I signed the reaff. About 10 days after the the discharge. The cram down of the car is in the potition so there for it is done. The auto company states that we did not sign the reaff in time so it is null and void. Now that I re-read the reaff. I must have been sleeping when I did sign it because I agreed to pay the full amount. My question is 1) if the potition that was discharged states I owe the market value on the car can they reinstate the original terms of the loan which makes the balance 3 times the market value? 2) The car originaly had a co-signer, The cram down was done because it could not be wiped out or the c0-signer would have to take responsibility of the loan. So I can not just giveback the car due to the market value balance ($6500). If I walk away from it im sure they can collect the balance. Not sure what to do. My thoughts were to send citi Financial the discharge papers and tell them I will pay them $6500 to get them out of my hair. Being that the reaff was signed after the discharge and they state it’s null and void I would think they have no choice…

    Any Advise would be appriciated…

  • Stacey

    I am filing Ch 7 in PA. Under the new law, do I have to sign reaffirmation? My husband is a co-signer on an auto loan…he is NOT included in the bankruptcy filing and therefore “technically” taking over the loan even though I will be making the payments. Would it be in my benefit to sign a reaffirmation agreement to get “credit” for making the car loan payments or should I just let it go? My attorney told me they cannot take my car if I keep making the payments. Correct? Since Husband is co-signer they can’t do anything. I spoke to loan holder and they said this would NOT affect Husband’s credit so long as there are no late payments (which they are not any). Should I sign the reaffirmation agreement to assist in rebuilding my credit or just let it go?

  • Ruby

    I have recently filed Bankruptcy Chapter 7 and have now received a “affirmation agreement” for my car. I want to know if there is a way to get the finance company to lower my payments before I sign the affirmation agreement or does that happen at court. I have no attorney since I can’t afford one. My car payments have been hard to make as it is with unemployment benefits so does anyone know if there is a way to do this.

  • Lynda

    I was not represented by council after completing a chapter 7, but did sign papers to re affirm a vehicle. Papers say i have to have it approved by court since i don’t have attorney but never received a court date and was never signed by judge. Question is that now vehicle has been returned and am I accountable for this dept?

  • Arthur

    Question: Who is responsible to initiate the reaffirmation agreement?
    The lawyer says the loan company, the home loan company says the lawyer.
    As a result, we are at a stalemate.

    Any advise,

  • Olivia

    Just heard from my attorney that the my chapter 7 bankruptcy case was discharged. My question is that one of our creditors requested a reaffirmation agreement on some purchases that I made on their store credit card more than a year ago, way before I filed. My lawyer.. actually not even my lawyer, it was his paralegal that did the agreement and the deal. Told my husband and I that we needed to agree to the agreement or we needed to either return everything that we purchased or pay back the full balance on the credit card. If we didn’t do either, then the creditor could file a lawsuit against us. Of course we signed, not knowing other wise. We figured our attorney knows best, right? Well it has now gone through a hearing and the judge DENIED IT. He pretty much laughed at my lawyer and didn’t even let us speak not even our attorney was able to say anything. The judge stated that the creditor is trying to get us to pay them back not seeing the financial impact it will put on us. Especially since our debt is more than our income. I actually agreed with him. I feel that my lawyer should of realized this too. So, since it has been denied by court, do I still need to pay it back?… I really can’t afford it. I mean this is the reason why I filed a chapter 7. I want to be able to start fresh and be able to manage our finances better this time with out credit cards. What can I do? Can I still cancel and get it discharged?…and do I need to return everything back. I mean is this the same case as a house, boat or car? I thought credit cards were dischargeble. Please advice???

  • veronica saenz

    My mom filled chapter 7, I took over the loan so I am paying for the loan (vehicle), how ever now that is time to filled the reaffirmation letter, my mom lawyer is saying that he doesn’t like to do those, because there is no guarantee that the loan will be paid. Since there is a questionnaire about my mom’s income which she does not have much there anything we can do, I like to make a payment today…but if the car is going to get lost…what for.

  • Joe

    You just walk away. You cannot sell the house unless you pay off the mortgage entirely, in which case the bank should give you the deed.

  • Gerardo Camberos Jr.

    I am a little confused, my mom co-signed for me in 2007 to get out a loan for new Tacoma Truck. I recently found out she and together with my dad filed for a Chapter 7 bankruptcy, and to make my worries worsr they included my truck my truck in the process. I was also informed that the judge denied the ‘Reaffirmation Aggreement’. My questions are; will it affect my status in original contract? Will the truck be taken away from me? I am frustrated and worried that it could happen. I been making on time payments before and after they (my parents) filed for bankruptcy. Need some advice of what options I have and what I can do to get this settle the right ways and have no worries.

  • Pete

    What happens if you are late in your payments and still have the auto? And waiting for the 90 days to surrender

  • Chrissy

    M.J.J. what ever happened with your credit union? Did they insist you pay even though the debt was discharged in the bankruptcy or were you able to make them turn over title to you? Also, were you able to negotiate your reaffirmation car loan? Did they lower the principal or interest? I’m in a similar situation but have not filed bankruptcy yet. I’m trying to get them to settle with me for 25% of the visa loan and let me make my regularly scheduled payments for the car. Any advice anyone? Thank you.

  • Dave

    What happens when a creditor cannot provide evidence that they are the loan holder of record after being subpoenaed and the creditor refuses reaffirmation?

  • joe


  • ChuckieB

    I filed bankruptsy in 2010 and never signed a re-affirmation agreement on a mobile home payment that I have. I no longer want the property, am I still held liable to make to the payments on this mobile home if I decide to walk away from it?

  • Gail

    My son’s wife’s car was in his name as the owner, she was the co-signer. She walked out on him several months ago, they are now divorced. He is on disability and needed to get his VA mortgage modified and in the process he discovered that she had reaffirmed the car debt in his name when she filed for bankruptcy, after she left him and while they were in the process of getting a divorce. Was this legal and didn’t she need his signature to do this? As I’ve said before, he was the owner and she the co-signer on the car loan; she wanted to keep the car. It’s affecting his ability to get his modification. He did not know that she had done this because their divorce decree states that she must get the car refinanced and have his name removed from the title. It’s not possible for her to do this because her credit is now bad and she is threatening to just let them come get the car and this will hurt his chances for modification by placing a bad mark on his credit. What kinds of options does he have to correct this situation?

  • wendy

    We filed bankrupcy in _2008 we chose to keep our car tractor
    Our home and our motorcycle looks like we signed reaffirmation papers on the bike and tractor mortgage was never reaffirmed and my car.we were never late on any payments.all three credit reports shows we included everythink in our bankrupcy.I’ve been fighting with our mortgage company because they r not reporting our payments saying we don’t owe anything .we owe zero on everything but we continue to make r monthly car company told us if we don’t like it we can turn the car in they r not changing nothin on r report.We keep calling our attorney he keeps blaiming the car companywhose responsible to file these papers?how can my mortgage state we discharge our mortgage if we still pay on it and live in it?I’m trying to clean up our credit so we can get student!

  • Jennifer

    We filed bankruptcy in 2010 and had a court date to reaffirm our car loans and our mortgage loan with chase. Well chase said they couldnt find our paper work and it never made it to the courts when our hearing came up. Well we are no longer able to keep our house and was going to walk away from it but upon looking at our credit found out it was reaffirmed! We contacted the courts and they told us it was filed but did not have a judge’s signature on it. We did go through a paralegal to get our bankruptcy together we have no idea what to do now?? I have contacted a few lawyers and they either dont want anything to do with it or have to pay a huge fee for a consultation to maybe end up telling us we could just walk away. If anyone has been in this situation or can give any advice would appreciate it!!

  • Brett Weiss

    “As a debtor, there seems little risk in signing a reaffirmation agreement…”

    To the contrary, there is *enormous* risk if a debtor signs a reaffirmation agreement–and in the overwhelming majority of cases, so long as payments are kept current, the debtor keeps the car without any reaffirmation agreement.

    If, for *any* reason, payments are not made, or are made late, the debtor’s post-bankruptcy credit can be severely damaged and the loan can be collected as if the debtor never filed for bankruptcy. And if the loan goes into default and the car is repossessed, the debtor is liable for any deficiency.

    Other than Ford Motor Credit, all national car lenders continue to allow “retain and pay,” that is, so long as payments are kept current, the debtor keeps the car without having to sign a reaffirmation agreement. Some small, local lenders might have a different standard, but even here, the state’s laws must allow a repossession even where payments are current, and many do not.

  • Cheryl

    I am going bankrupt chapter 7 but I don’t want to put my House in it my mortgage comp. wants me to sign a affirmation what do you think i should do

  • sandra


  • Lynette Andrea

    Shortsale the home or make a Request for a modification.

  • Lynette Andrea

    In your statement of intent, you should declare to keep the home and create a new agreement with new terms.

  • Carol

    I recently filed bankruptcy and my first court date is come up in a couple of weeks. I received a reaffirmation agreement for the car and for my mortgage. I did the bankruptcy myself and I am not sure about the reaffirmation agreement, if the car finance company will lower my payments. I tried to get a loan modification from the mortgage company and they are not for it at all. They took my info down, but told me it doesn’t look like I will get it because now since I don’t have to pay my credit card bills, I will have enough money to make my house payment. It is a rather large amount and I was working when I bought my home, but now I am retired and the payments are high for a person who is on SS. Do I have to file the papers for the reaffirmation agreement when I appear in a couple of weeks or do I do it before I go, or does the finance company do it?

  • chad

    Im in the exact situation, can anyone tell me what you found on the matter. Im under the impression that the damage has already been on your credit. when i look at my credit report it shows the house was covered under chapt 7 bankrupcy in 2005 and shows a 0 balance. If I walk away they cant report that b/c its already there. Or will a forecloser show up on your credit later?

  • clint

    Someone please answer? I had a ch 7 in 2004 and received a discharge. My Mortgage was not reaffirmed. My credit score has improved to the point that I could buy another Home. Would my credit be affected if I walk away from my current mortgage?

  • Christina

    I am in the same exact postion right now, car is paid off, but I owe on an unsecured loan with the same credit union that the car loan was with. They are holding the title. Can they repo my car once I include the unsecured loan in my Chapter 7?

  • suz

    hey i am wanting to know the same thing.. we never signed a re affirmation on our house can we walk away from it?

  • Lori

    In 2009 I filed full bankruptcy. Because the courts deemed that some of my income was actually an asset after the initial filing I am responsible for some of my debt which IS currently being paid thru the Trustee. When i filed the initial paperwork I did add in the the Intent to reaffirm the loan paperwork for my car. Neither I nor the loan company actually went any further with it and actually reaffirmed the loan thru the courts. Now I am unable to pay for the car and they are threatening repossession. If they reposse it am I liable for the remaining balance on the loan? The trustees office says no since the bankruptcy has already been discharged without reaffirmation but the loan company says yes. So confusing

  • Bobbie

    I have filed for a divorce over a year ago, my husband refuses to come to an agreement, now hes decided he wants to file bankruptcy. I have been living in home and making the payments, and driving the dully pickup and making the payments, he has these listed on the bankruptcy, they are in both our names, how and what do I do?


    I filed chapter 7 bankruptcy and its been closed for 7-8 months now. I signed the reaffirmation form to keep my vehicle and was trying to trade it in for a different car but they are saying i cannot do this. They said that in the system it doesn’t look like my vehicle and it looks like I’m more less “renting” it. Even if the car dealership were to pay the remaining balance on my loan I still cannot turn it in. I’m confused. My lawyer is saying he shows that I did sign the reaffirmation letter and he sent it in but my bank I’m financed through on my car is saying that he didn’t turn it in, but they are showing that they DID send it to him. I’m not sure what to do at this point. As of now, by pay off amount on my car keeps getting higher and higher due to my bank charging me almost $3 per day of interest. Do you have any advice for me?

  • ddc

    My Chapter 7 is not completed . I did not reaffirm my mortgage. I still live in my double wide and have been on time with payments however I may have to move because of work. will i owe the remaining balance? I remember the attorney telling me I can just walk away if I do not want the home any loinger. I know my monthly statements say that the bank has the right to collect the property as collateral if I do not pay the monthly payment. Any help or suggestions would be helpful.

  • Phil

    if auto lease is paid in full why does the company want a letter of reafermation for a new lease

  • Phil

    if auto lease is paid in full why does the company want a letter of reafermation for a new lease after i filed bankrupsy i kept paying this lease

  • Laci

    We signed a reaffirmation in order to keep one vehicle. We have made all payments on time. We are almost to our 2 year after being discharged date so we had our credit checked. Our loans shows that we have been 90 days delinquent for the past 3few years. This is not possible. What should we do?

  • Bianca

    Did a chapter 7 almost 2 years ago. Have been paying my vehicle not sure attorney filed reaffirmation agreement because when applying for a new car loan they the loan shows as Curr account Loan type Bankruptcy chap 7 w/ no payoff . It is hard to make payments Im making less money what if I give them the car back will it hurt me more or is in cvd in old BK?

  • Jim

    I filed bankruptcy 2 years ago. We signed reaffirmation papers on a car and our home. The reaffirmation indicated that the debt being reaffirmed by our mortgage is 30,000.00. We owe over 200,000.00. What exactly does this mean? Does it mean we are only legally liable for $30,000.00 of our home mortgage? When the Judge went over our paperwork over the phone, along with our Attorney, he said that somewhere down the road that our Mortgage company will realize they made a mistake on the reaffirmation papers. We didn’t think anything about this, because we truely didn’t understand the whole reaffirmation process. Now we are thinking about selling our home, because we can no longer afford it due to another income decrease. What does the reaffirmation mean to us…are we only legally liable for the 30,000.00. What if we let our house go..would we still be only liable for 30,000.00 since that is the only amount it states that was reaffirmed?

  • Cheryl

    I filed bankruptcy a few years ago. I did not sign a reaffirmation letter. We now qualify for a re-finance loan through the HARP program however because we did not sign a reaffirmation letter we cannot get the loan. Is there anyway we can sign a reaffirmation letter now? I was advised by Bank of America that we cant do it now and my attorneys office said we shouldnt and that its not an option anyway. We have never been late on our payments. There must be something that can be done. Any suggestions?

  • ms moore

    I had a chapter 7 and signed a reaffirmation with the judge and the bank and a week later they came and repoed my truck? and sold it with out letting me know.

  • Sam

    I filed Chapter 7 and did not sign the reaffirmation on my Ford Truck as advised by my lawyer. I have been current and never late on a payment, today they came and repossessed my truck. I put 15,000 down on the truck and have been making $700 a month payments for 2 years. I want my truck back, how can I get it back? Ford is telling me the only way I can get it back is to pay off the 38,000 balance. This is not right, I only did what my lawyer told me to do. I need that truck back….. HELP!!!! I’ll sign the reaffirmation!!!

  • Jeanette

    I file bankruptcy this past week and everything went ok with the judge. Can I still talk to the bank and get a reaffirmation agreement before the bankruptcy is discharge?

  • beausmom

    I am considering filing bk on my own, do I contact the auto finance company and tell them I want to reeaffirm the loan for the actual value of the car and wait for them to send me paperwork? or do I say nothing to them & just list that it is my intention to reaffirm for actual value of the vehicle on the bk paperwork and let the bk court notify them of my intentions? Once they are notified by bk court does that prompt them to send me paperwork?

  • beausmom

    I ask, because I have heard that once you file bk they can’t reposse the car until bk is determined.. I am behind in payments…

  • marie beasley

    October 2011 I received my discharge papers on Chapter 7 state of MD, I am trying to refinance under Bank America MHA, they say I failed to file a reaffirmation agreement with them, and now they will not consder me for a lower rate, even though I have not been late on any payment in the last 6months.. and have issued me a note to that effect…Is there anything I can do? Or is it a dead end.

  • Jean

    I file for Bankruptcy, but I had co-sign for a car loan for my brother, which I included in bankruptcy. I got the reaffirmation forms, but want to know if my brother also have to sign this form (even though he did not file for bankruptcy) and do I sign where it say borrower (even though I am not the borrower) but co-borrower as I co-signed the loan

  • Flo

    I am in the same boat as some of you also…..I filed bankruptcy in 2006 and recently tried to get refinancing at a lower interest rate on my home mortage through Bank of America and they are denying me the loan although I have been making monthly payments to THEM (B of A)…..every month and have never been late!!! It just doesn’t make sense and it doesn’t seem fair. My lawyer didn’t mention reaffirmation when I filed and it came as a surprise to me when the underwriters mentioned needing the reaffirmation letters!!!

  • Jonah

    We filed bankruptcy in 2009. We had a second mortgage. We got a reaffirmation on the first mortgage but not the second. We continued making both mortgage payments but due to the death of my husband I stopped making the mortgage payments for the second in Feb 2012. My court papers and the credit bureau says the second mortgage was discharged. Does this mean that I didn’t have to make those second mortgage payments and am I not liable for it now? Thanks

  • gary tait

    On all 3 of my credit reports it shows that Citizens Bank “charged off” my home equity loan even though I didn’t include them in my bankruptcy as I wanted to keep my house. The charge off amount is $0 and I still pay my regular amount but my credit reports are messed up with two also saying the account is closed. Citizens won’t even fix that part even though it is obviously open. They said my attorney neglected to file the reaffirmment papers. Was he responsible or was the bank about the reaffirmment? Even though I was never late on the home payments (which they are also not reporting since bk) this is making it harder to refinance. Do I have any recourse about the affirmation or my credit reports as I contacted all 3 bureaus and Citizens won’t fix anything?


    gary Tait. Reaffirmation is first, the responsibility of the bank to secure their loan, second, it is your responsibility to sign it IF it makes sense to do so or not if it doesn’t. Third, the attorney signs it if you agree to reaffirm then sends it back to the bank, and the bank files it with the court, and the judge signs if provided it is evident that you can afford the payments.

    ALL your debts are subject to the bankruptcy. You can not exclude a creditor. If you left it out by not informing your attorney, then you made a big mistake. You also can not reaffirm a debt if it is not listed in your petition. So the big question is Why was the HELOC not in your bankrupty?


    Jonah, you are in a classic Catch 22 situation. You don’t owe the second loan, but they still have a valid lien against your property. They can not sue you because of the discharge and their only means to collect is by sale of the home IF enough equity exist to pay the first loan in full.

    So the what do you want to do about the second? You can ignore it for now. You can off settlement for payment in full in exchange for release of the lien. Either way, I would not resume regular payments.

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