Massachusetts Reaffirmation Agreements
How Massachusetts Reaffirmation Agreements Work During Chapter 7 Bankruptcy
When someone needs to reset their financial health, they might pick Chapter 7 bankruptcy to do so. Also known as liquidation bankruptcy, this system helps someone clear unsecured debts that don’t have collateral. In short, this process means a person liquidates their assets to pay off creditors and satisfy their debts.
Yet, Chapter 7 bankruptcy liquidation only addresses debts that are unsecured. In other words, a person might still need to deal with loans that have collateral such as a home or car loan. After filing for Chapter 7 bankruptcy, a person will likely receive a reaffirmation agreement regarding the collateral-backed property they stated that they’d like to keep. A reaffirmation agreement will allow a person to renegotiate the terms of a debt they’re having trouble paying but still wish to keep.
If you have questions about a Massachusetts reaffirmation agreement during Chapter 7 bankruptcy, it’s best to speak to a law firm. Call us today at (508) 502-7002 for a consultation or continue reading below to learn more about reaffirmation agreements.
The Reaffirmation Agreement Process
As mentioned above, a reaffirmation agreement is a way to restructure collateral-back debts that a person wishes to keep after bankruptcy. It’ll also ask them to acknowledge that they owe money and want to recommit to making payments for the property.
During the reaffirmation agreement process, the debtor can request new terms on their loan so they can continue to make payments. If the lender agrees to these terms, they can sign the agreement and file with a motion at court. Then, the court will approve or deny this agreement during a meeting. A judge will only approve of a reaffirmation agreement if they believe that the person who filed for bankruptcy will be able to satisfy its terms while remaining financially stable.
Should You Reaffirm, Surrender, or Redeem During Bankruptcy?
A reaffirmation agreement is only one option for managing secured debts. A person filing for Chapter 7 bankruptcy can also choose to surrender or redeem property that’s backed by a secured loan. However, this decision should be approached carefully and with the assistance of a qualified Massachusetts Chapter 7 bankruptcy lawyer.
Sometimes, a person won’t be able to pay a loan even after a reaffirmation agreement. Additionally, a person might not want to keep the property that’s tied to a loan. In these instances, they can choose to surrender an asset. For example, if a person decides that they can’t make payments on their home, they can vacate it and give it back to their creditor. Or, if a person has an auto loan that they do not want to reaffirm, they can surrender their vehicle to the lender.
In some instances, a person can protect their property during the bankruptcy process by redeeming it. To redeem property, someone can pay off their loan or offer fair market value to satisfy it and assume ownership of an item they were in debt over. It’s important to speak with an attorney before choosing this option because it can disqualify a person for bankruptcy if done incorrectly.
Plan Your Chapter 7 Bankruptcy with Miller Law Group, P.C.
Chapter 7 bankruptcy is a process that’s meant to help a person recover from financial difficulty. When you approach your bankruptcy with the assistance of an attorney, you’re making sure that your planning as much as possible for a successful and beneficial bankruptcy. A lawyer will help you through the Chapter 7 bankruptcy process and help you work out reaffirmation agreements with creditors as needed.
Miller Law Group, P.C. is completely focused on bankruptcy issues in Massachusetts. Our team of Chapter 7 bankruptcy lawyers understand the unique aspects of Massachusetts bankruptcy law and are ready to make sure you’re receiving the help your future deserves. We know this process can be difficult and always seek to make it easier by providing advice and guidance that’s focused on one thing: your financial recovery.
Call us today for a free initial consultation with our Massachusetts Chapter 7 bankruptcy lawyers. Our team is standing by to help at (508) 502-7002.