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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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We are considering filing Chapter 7. With my loss of a job

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We are considering filing Chapter 7. With my loss of a job and having to take out payday loans has hurt us even more than it helped us. I've read we can reaffirm on house and truck, and can keep 1 vehicle for every licensed driver in the house. Is this correct?

cfortunato :


Hi - my name is XXXXX XXXXX I'm a Bankruptcy and Consumer Protection attorney here to assist you.

Sorry this took so long. I sent an answer yesterday, but I see it did not go through.

1) Although it is rarely a good idea to do so, a Bankruptcy filer has the right to re-affirm any debt - including a mortgage or vehicle loan.
2) If you file a Bankruptcy, you and your wife are allowed to keep a total of $60,000 worth of personal property, which can include one vehicle for everyone with a license, or anyone without a license who depends on someone with a license. You are also allowed to keep any vehicles that have little or no value, or that have loans that are greater than the vehicle's value.
Customer: replied 4 years ago.

Trust me, I know it's not usually a good idea. However, since I've lost my job (I'm the wife), the bills are piling up so high that we can't keep up and my job doesn't start until mid August. The credit card bills are drowning us due to me losing my job 2x in a year. We also have our cell phones, which my husband has to have for his job and I will need to have for my new job. I'm so dang stressed it is unbelievable.

You may have misunderstood me. I did not mean to say that filing a Bankruptcy is rarely a good idea, as filing a Bankruptcy often is a good idea. I meant that re-affirming any debts is rarely a good idea - as there is usually no need to do so - because you can continue to pay any debts you want to pay without re-affirming those debts.

Customer: replied 4 years ago.

I did indeed misunderstand you. So what exactly is meant by reaffirm? Sorry for all the questions, but this is brand new to me/us. The way I've understood it is you MUST re-affirm the things you want to keep/keep paying on. I.E.- the house and vehicles. I'm just so confused as to all of this. While I agree we need a 'fresh start', this is one journey I'm scared to travel on.

Don't feel bad that you are confused - Bankruptcy can be very confusing.
Re-affirmation means you sign an agreement that the debt will not be discharged in your Bankruptcy. This means that if something unforeseen happens, and you can no longer pay those debts, the creditor can try to collect (eg. by wage garnishment) even though you filed a Bankruptcy.
If you do not re-affirm debts, you can continue to pay them, but if something unforeseen happens and you can no longer make the payments, the creditors cannot try to collect the money from you.
So there is basically no advantage for a Bankruptcy filer to sign any re-affirmation agreements.

Customer: replied 4 years ago.

Ok. Just to make sure I have this right. If we do not reaffirm on our financed vehicle we will lose that in the bankruptcy correct.

You will not lose your vehicle in your Bankruptcy if you do not re-affirm the loan for that vehicle.
Re-affirmation is not required to keep property - vehicles or homes.
Customer: replied 4 years ago.

Ok thank you so much for all your help. :)

You're welcome!
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