Should I Reaffirm?

If you are thinking about reaffirming, the first question should always be whether you can afford the monthly payments.  Reaffirming any debt means that you are agreeing to make the payments every month, and to face the consequences if you don’t.

If you have any doubts whether you can afford the payments, do not reaffirm.  Caution is always a good idea when you are giving up your right to have a debt canceled.

Before reaffirming, always consider your other options.  For example, instead of reaffirming a car loan you can’t afford, can you get by with a less costly used car for a while?

Some offers to reaffirm may seem attractive at first.  Let’s say a department store lets you keep your credit card if you reaffirm $1,000 out of the $2,000 you owed before bankruptcy.  They say it will cost you only $25 per month and they will also give you a $500 line of credit for new purchases.  What they might not tell you is that they will give you a new credit card in a few months even if you do not reaffirm.  More importantly, though, you should understand that you are agreeing to repay $1,000 plus interest that the law says you can have legally canceled.  This is a big price to pay for $500 in new credit.

For more information about bankruptcy, please call us at 408-294-6100, or e-mail us via info@sjconsumerlaw.com.  One of our attorneys will be able to answer any questions which you may have in greater detail.  Please remember that the foregoing information is of a general nature, and does not constitute legal advice.  The facts of each situation are unique, and we must discuss those facts with you before any advice can be given.