It’s been said that bankruptcy "wipes the slate clean" and provides the debtor the chance at a "fresh start." This isn't completely fact as it's foolish to think that all your past debts will be wiped away just by filing bankruptcy. With Chapter 7 bankruptcy, most of your debts are absolved after the liquidation of your nonexempt belongings. However, your non-dischargeable debts stay to be dealt with and that's where reaffirmation comes in.
Reaffirmation of your debts isn't a completely bad thing. It’s one of the easiest ways that you can repair your credit which is absolutely crucial after filing bankruptcy.
What is Reaffirmation?
Reaffirmation of your debts is basically a formal agreement between you and your creditor that you plan on honoring your debt to them even though you have filed bankruptcy. As mentioned above, this will help you rebuild your credit but only if you actually honor the debts by paying them on time. Do not reaffirm debts that you have no intention or means of paying off because that'll only further damage your credit and might cause your creditor to file suit.
Most lenders will be willing to work with you since they don't want to go through the bother of a lawsuit and are aware that you have just gone through a bankruptcy. Most lenders will work with you in reformatting a repayment plan and even lowering the interest rate so you could afford it.
If this isn't the case given your situation then you might want to consider waiting for Chapter 13 eligibility to take care of these unsolved debts. Talk to a credit counselor or your bankruptcy attorney today about why reaffirming your debts after filing Chapter 7 bankruptcy is so crucial.
Related Links:
bankruptcy attorneys