If I File For Bankruptcy, Can I Exclude Any Of My Debts?

Occasionally when someone files for bankruptcy, he or she might wish to keep certain debts out of the bankruptcy and continue paying on them. In a Chapter 7 bankruptcy, the mechanism for accomplishing this is to reaffirm the debt. A reaffirmation agreement is an agreement between a debtor and a creditor that provides for this arrangement to be put into place. A debtor who signs a reaffirmation agreement has 60 days after the agreement has been filed, or until the discharge date, whichever is later, to change his or her mind and advise the creditor that the agreement is being rescinded.

Why Would Someone Want to Keep Some Of Their Otherwise Dischargeable Debt?

A reaffirmation agreement diminishes the effectiveness of your bankruptcy discharge, but there may be reasons that one would choose to reaffirm a debt. The best example of this may be a situation in which a debtor does not want to lose his or her vehicle as a result of filing for bankruptcy. In this scenario, if circumstances allow for it, the debtor may choose to keep the asset as well as the associated debt. In these cases, debtors can enter into a reaffirmation agreement with a creditor. The reaffirmation agreement establishes a renewed promise by the debtor to pay for an asset. It is the mechanism by which they debtor becomes legally obligated to pay all or part of an otherwise dischargeable debt. However, because it does contradict the ‘clean slate’ concept of a bankruptcy discharge, it is highly advisable to speak with an attorney before making a decision to take this action.

Seek Professional Legal Advice Before Making A Decision to Reaffirm Debt In A Bankruptcy

If you have been struggling to keep up with debt and it is starting to seem like an impossible task, contact Whitten & Whitten to discuss whether bankruptcy is right for you with an experienced bankruptcy attorney. Further, if you are thinking about bankruptcy and trying to decide whether it would be beneficial to keep a specific debt out of it, you will want to seek the advice of a legal professional to help you know the pros and cons of doing so. At Whitten & Whitten, we have the experience and knowledge you can count on to help you decide what is best for you. Call us at 219-756-0555 or contact us online to get started today.