North Chicago Bankruptcy Attorney On Keeping Debt After Bankruptcy

There is no guarantee that a debtor will be able to keep debt after filing states North Chicago bankruptcy attorney.  If the court feels that the debtor does not have the ability to make those payments comfortably, then the court could throw out the reaffirmation agreement and find that it has an undue hardship on the debtor to allow it to go forward.  In other cases, the judge will see that there might not be significant income to pay the debt but the presumption of undue hardship is rebutted.  Whether or not the reaffirmation agreement is going to be accepted by the court is up to the individual judge, however, in 99% of the Chapter 7 bankruptcy cases that I handle with reaffirmation agreements, they are ultimately approved by the bankruptcy court. 

Once you reaffirm a debt, you have to be aware of the fact that that debt is going to survive the bankruptcy.  What this means is if anything happens to that vehicle a few months after the bankruptcy case is closed, you as the debtor are going to be responsible for any outstanding balance on that item; so if you are questionable on whether or not you have the ability to afford that vehicle or whether that vehicle is worth what the creditor wants you to sign on the dotted line for again, you might want to consider giving up the vehicle and getting a fresh start.  By filing a Chapter 7, you as the debtor have that option as to whether or not you want to reaffirm the debt, surrender the debt or redeem the debt. 

To redeem the debt means you are going to make a lump sum payment for the fair market value of that item in exchange for the creditor giving you the title to that vehicle.  In a redemption situation, the debtor typically gets financing from a third-party and this has to be done on motion of the court, motion to redeem the item.