Is reaffirming my debt a good idea?
Reaffirming your debt after you have filed for bankruptcy means that you are agreeing to repay a certain debt that would have otherwise been discharged. You sign a debt reaffirmation agreement, reaffirming to your lender or creditor that you will repay your debt. In return, you are allowed to keep the property that is the subject of the debt.
Normally, when you file for bankruptcy, creditors of your secured debts can treat the bankruptcy as a default and therefore repossess their collateral, such as a car. While there are property exemptions applicable to bankruptcy cases, the only sure way to retain a piece of property is to reaffirm the debt.
That does not mean, however, that reaffirming your debt is always a good idea. If you fail to make your payments, not only can your creditor repossess your property, but you are also still responsible for the balance of the debt.
Whether or not you should reaffirm a debt is a matter of deciding how badly you want to keep the property and whether you will be able to afford to make the payments. An experienced bankruptcy attorney can assess your situation and help you decide whether it is a good idea to reaffirm your debt.