If you file Chapter 7 Bankruptcy and you have secured debt, such as a car loan or a mortgage chances are you will be offered to opportunity to “Reaffirm” the debt. Reaffirming a debt essentially removes it from the Bankruptcy. If you reaffirm a debt you sign on to that debt after filing, making it a “post filing” debt that is not discharged in the Bankruptcy. Some car lenders, like ALLY Financial require you to reaffirm the debt if you want to keep the car, others allow you to retain and pay. If you are faced with the choice of reaffirming a debt you should consult your attorney to go over the pros and cons. Also, be aware that the Court has to approve a reaffirmation agreements so even if you want to keep that Harley or Motor Home, chances are the Court won’t let you.
