Expert: Terry Leeders - 4/15/2008

Question
I filed Chapter 7 Bankruptcy last year and managed to hold on to my home.  I checked a box in the bankruptcy paperwork stating that I wanted to hold on to my residency.  I am falling behind on my payments and want this debt to be included on my bankruptcy.    Is this a reaffirmation agreement by the Court.  Or is there more to it?

Answer
A reaffirmation is a document signed by the creditor, the debtor, and usually the debtor's attorney.  This states that the debtor will continue payments on the debt after bankruptcy.  It keeps the debtor on the hook, thus allowing the debtor to keep the asset.  This document is filed with the court, and is usually reviewed by the court to verify that there is no undue hardship on the debtor.  It sounds like you are referring to your Statement of Intention, that you intend to sign a reaffirmation agreement to keep the home.  If you do not sign a reaffirmation, you are not liable for the debt, and the creditor can take the steps necessary to collect the collateral back (here, foreclose.)  Check with your lawyer to confirm if you have signed a reaffirmation agreement with the lender.