Securities Fraud Lawyers Blog
During a bankruptcy filing, most people wish to keep their home and vehicle. In some cases, secured creditors will ask people filing bankruptcy to sign a reaffirmation agreement. In nearly all cases, this is not a good idea for a number of reasons.
What is a reaffirmation agreement?
Reaffirmation agreements are in effect an agreement that you owe a lender money. One of the things that many bankruptcy filers are unaware of is that when they file bankruptcy, the promissory note portion of the mortgage is part and parcel of the bankruptcy. If you do not sign a reaffirmation agreement, and later have trouble paying your mortgage, the lender cannot hold you accountable for the debt. This also means if your home is sold for less than what you owe, the lender cannot successfully pursue a deficiency judgment.