What is Debt Reaffirmation in Chapter 7 Bankruptcy?
The fundamental principle behind Chapter 7 bankruptcy1 is the liquidation of a debtor’s assets in order to pay off his or her debts. As a result, one of the reasons that people are wary about taking advantage of the benefits of bankruptcy is the the worry that they will lose all of their possessions. Fortunately for debtors, the Bankruptcy Code provides a variety of exemptions that allows people to exempt certain property from their bankruptcy. For people who want to keep property that is not exempt, debt reaffirmation2 is an option.
In many cases, the assistance of an experienced St. Louis bankruptcy attorney can help debtors retain significantly more of their property than they could if the file for bankruptcy without a lawyer. To schedule a free consultation with attorney Kenneth P. Carp, call our office today at 636-947-3600.
Debt reaffirmation can help you keep secured property
Many people who have fallen behind on their debts also have cars or homes that they have financed. When a consumer finances an item, the lender usually holds a security interest in that item as collateral for the loan. This means that if the consumer stops making payments, the lender can take the property from the consumer and sell it in order to satisfy the debt.
If a consumer who has financed secured property includes that property in his or her bankruptcy, that property is automatically liquidated in order to pay the creditor. Debt affirmation basically excludes a certain debt from a person’s bankruptcy, meaning that he or she is able to keep the property so long as he or she keeps making regular payments. In some cases, debt affirmation needs to be approved by the court, so it is important for anyone considering reaffirming a debt to discuss their options with an experienced lawyer. Additionally, reaffirming a debt is a good opportunity to renegotiate the terms of your loan, and a lawyer can often help obtain better terms than an unrepresented person would obtain.
Contact a St. Louis bankruptcy lawyer today to schedule a free consultation
The assistance of an attorney can often result in a much better outcome for people who file for bankruptcy. Call the Law Offices of Kenneth Carp today at 636-947-3600 schedule a free consultation with one of our attorneys.