Why Would A Debtor Enter Into A Reaffirmation Agreement

A creditor may continue to accept payments as part of a confirmation agreement rejected by the court if the creditor believes in good faith that the confirmation agreement is effective. See 11 US. C 524 (l) (2). Subdivision (a) the rule is amended so that the company presenting the confirmation agreement with the court also includes the official form 27, the cover bulletin of the confirmation agreement. The form contains the information necessary to enable the court to determine whether the proposed confirmation agreement is considered unreasonable harshness for the debtor within the meaning of Section 524, point m) of the code. Section 4008 is also amended by removing the provisions relating to the date of a confirmation and discharge hearing. As noted above, point 524 m itself requires that hearings be held on unreasonable cases before the discharge is opened. On other issues, including hearings for the approval of unrepresented debtors` confirmation agreements under section 524, (c) c) 6), the rule leaves the Tribunal with the power to establish oral proceedings at a time appropriate to the particular circumstances of the case and in accordance with the parties` planning requirements. If the debtor has not been represented by a lawyer during the negotiation of the contract, he must appear in person at the hearing in order for the confirmation agreement to be approved. You should ask yourself if you should enter into a confirmation agreement. There are professionals to sign one, such as keeping their property secure and avoiding the need for a lump sum payment. You can also sign an agreement if you have a co-signer on the debt. Perhaps most importantly, this can be an opportunity to renegotiate and get a lower payment or a better interest rate.

In entering into a confirmation agreement, a borrower often retains the possession of an asset held as collateral such as a house or a car, provided that he can repay in full the debts he owes for that specified loan. Figure. When a creditor in auction rights repossesssesss the debtor`s car, the creditor`s resale of the car will often be for less than the retail value of the car and will not provide enough revenue to cover the outstanding debts. If z.B. a creditor withdraws and sells the debtor`s car for $11,000, so that $9,000 of a $20,000 debt remains unpaid, the creditor can recover the outstanding balance of $9,000 as the debtor`s personal debt.