When an individual is facing significant debt, they may be unsure of what to do or what their options are. Often, these dire financial situations lead a person to begin considering bankruptcy. Bankruptcy can be a saving grace for many debtors and gives them the opportunity to have a fresh financial start. When filing for bankruptcy, the person has to take a means test to determine whether they can file for Chapter 7 or Chapter 13 bankruptcy. If the person is eligible for Chapter 7, they will have to determine whether they want to get involved in a reaffirmation agreement or not.
A reaffirmation agreement is when the debtor and the creditor file an agreement with the court to allow the debtor to keep property that they can not afford to pay off at the time. However, as part of this agreement, the debtor will not be able to discharge the debt and they will still owe the money. Clearly, getting involved in a reaffirmation agreement does have its pros and cons but if an individual really needs to keep an item, it can be useful.
If you have questions about reaffirmation or are thinking about filing for bankruptcy, contact our firm today.
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.