Expert: Terry Leeders - 1/22/2009

Question
I reside in Connecticut, use a credit union and have just filed for Chapter 7. I am signing a reaffirmation agreement and have 2 issues:

1.)  I understand that after I sign the agreement, I have 60 days to change my mind about the reaffirmation, and,

2.) I also have sixty days to make a payment.

With regard to the second question, then, as two payments will be late, my understanding is that those payments will be tacked on to the end of the current loan.

Is the above true?  What section of the law can I find this in writing?  

If I restart making payments two months after I've signed the agreement, then, make the payments regularly and on time over the course of the loan, will I still be two months late as far as my credit report is concerned?

Also, I understand that bankruptcy law is federal; consequently, there are no special laws for credit unions. Is this true?

I also understand that the amount of the reaffirmation cannot change.  In other words, if I owe $3,000 at 5% before the reaffirmation is signed; I owe $3,000 after the reaffirmation is signed.  Is this also true?


Answer
Normally, a reaffirmation agreement reaffirms the original contract.  If your reaffirmation sets different terms- amount, interest or due date, then you can adjust the payment accordingly.  If the reaffirmation is silent, then the contract terms apply.  If your reaffirmation says the payments will be kicked to the end, then they will be.  Read your reaffirmation, and ask your lawyer for any clarification.  

A reaffirmation can be rescinded within 60 days or the date of discharge, whichever is later.

So, it is a mix of federal and state law regarding your reaffirmation agreement.  The code requires the reaffirmation to be in a certain format, but can contain other terms as well.