A reaffirmation is a new contract that re-establishes your liability for a debt. Prior to the 2005 changes to the bankruptcy law many debtors reaffirmed mortgage and car loans. The new law makes most debtors ineligible for reaffirmation, especially if your monthly expenses are higher than your income or the property you are seeking to reaffirm has no equity. Several of my clients have tried to get Court approval for reaffirmations under these circumstances without success. Our Judge just does not sign them in most cases. Instead, you just keep making payments and the banks accept those payments.
So if your bank tells you they sent Jeff a reaffirmation agreement and want it returned, that may be true but Judge Jackwig will not approve it so just continue to make your payments. If for some reason you cannot make your house payment or car payment in the future you should be able to just surrender and avoid a lawsuit, collections, judgments, liens, and garnishment of your bank accounts and wages all because you did not reaffirm. Ironically, this part of the new bankruptcy law is better for clients by keeping them from reaffirming debt and causing problems in the future.
VIDEO RE. REAFFIRMATION AGREEMENTS
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