Reaffirmation agreements
Debtors concerned about their ability to pay off debts often wish to add as many accounts as possible to their bankruptcy petition. They believe that they have to do so if they do not have the financial means to pay off the total balances owed. However, there is a viable option on debts that are secured by property, known as collateral. Usually, mortgages and car loans that are reaffirmed need to continue being paid on their original terms. However, other secured lien holders, like furniture stores, may be willing to reduce the total balance owed and enter into a redemption or reaffirmation agreement with the debtor. The debtor gets to keep what they bought while paying the store a reduced amount they are better able to afford. A qualified bankruptcy practitioner in your jurisdiction can communicate with such creditors on the debtor’s behalf in order to achieve a solution where all parties come away with something.
