If you have filed for bankruptcy and have certain debts, you may have the option to reaffirm those debts. Reaffirming a debt means that you agree to continue paying it, even though it was included in your bankruptcy filing. Reaffirming debt is a process that can be used in Chapter 7 bankruptcy cases in Shelby County, or anywhere else in Alabama, to keep certain debts from being discharged. 
It is important to understand the special requirements related to reaffirming debt so you can make an informed decision about whether or not it’s right for you.
Not all debts can be reaffirmed. In fact, there are strict guidelines about which debts can be reaffirmed and how the process must be handled. Generally, only secured debts, such as a car loan or a mortgage, can be reaffirmed. Unsecured debts, such as credit card debt, cannot be reaffirmed. When you go to file for bankruptcy, your bankruptcy attorney in Birmingham can advise you on how reaffirmation agreements work where you live.
Additionally, the reaffirmation must be voluntary and not coerced by the creditor. This means that the creditor cannot threaten to repossess your car or foreclose on your home if you do not agree to reaffirm the debt.
Once a reaffirmation agreement is approved by the court, it becomes legally binding and enforceable just like any other contract between two parties. This means that if you fail to make payments as agreed upon in the agreement, then your creditor may take legal action against you in order to collect what is owed. Therefore, it’s important that you fully understand all of your rights and obligations under any reaffirmation agreements before signing them so that you know exactly what will happen if you fail to make payments as agreed upon.
It’s also important to note that while entering into a reaffirmation agreement can help protect your property from being repossessed by creditors during bankruptcy proceedings, there are some risks involved as well. For example, if your financial situation changes after entering into a reaffirmation agreement then you may find yourself unable to make payments as agreed upon which could lead to further legal action being taken against you by your creditors. Therefore, it’s important that you carefully consider all of your options before deciding whether or not entering into a reaffirmation agreement is right for your particular situation.
Overall, understanding special requirements related to reaffirming debt is essential for anyone considering filing for Chapter 7 bankruptcy so they can make an informed decision about whether or not this option is right for them. By doing research ahead of time and consulting with an experienced bankruptcy attorney in Decatur who specializes in bankruptcy law prior to signing any agreements related to reaffirming debt can help ensure that all of your rights are protected throughout this process so that everything goes smoothly when filing for Chapter 7 bankruptcy protection.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!