Chapter 7 bankruptcy filers in Texas are often required to sell off their assets in order to pay debts and avoid repossession or foreclosure proceedings that leave them with open liability for the unpaid portions of loans. Reaffirmation agreements in Dallas Chapter 7 bankruptcy, however, can enable you to avoid liquidation of your assets if you are willing and able to resume making regular payments toward your debts.
Chapter 7 bankruptcy attorney Reed Allmand, who is double board-certified in consumer bankruptcy law by the American Board of Certification and Texas Board of Legal Specialization, advises Chapter 7 clients on all aspects of reaffirmation agreements. If you are considering including one or more of these agreements in your Chapter 7 filing, make sure that you first understand their important benefits and potential drawbacks.
How Do Reaffirmation Agreements Work?
Dallas reaffirmation agreements that are part of a Chapter 7 bankruptcy are enforceable contracts under state law. A bankruptcy court will never require you to sign a reaffirmation agreement, and your execution of that agreement is entirely voluntary. When you sign and file it with the bankruptcy court, you can keep the asset (most often your vehicle or home) that is secured by the debt referenced in the agreement, but you must re-commit to making the regular payments toward that debt. If you are unable to or fail to make those payments, the asset is subject to forfeiture either through foreclosure or repossession, and your Chapter 7 filing will not protect you from any balance that remains on the original debt after the asset is liquidated.
How Do Reaffirmation Agreements Help a Chapter 7 Bankruptcy Filer?
The Dallas Chapter 7 bankruptcy process can move fast and be stressful, and a debtor might have second thoughts about a reaffirmation agreement that was signed as part of that process. Courts recognize this with the timing of the process.
Within 3 to 7 weeks after you file your Chapter 7 bankruptcy petition, the court will schedule a “341 Meeting” where a trustee and your creditors can ask you questions about your finances, which you must answer under oath. You generally have 60 days after that meeting to submit a reaffirmation agreement to the court. Given this timing, you will typically have three to five months to determine whether a reaffirmation agreement is right for you and have your bankruptcy lawyer file that agreement with the court. If you then change your mind, you can rescind the agreement within 60 days after you file it or before the court issues a discharge order for your bankruptcy petition, whichever is later.
This timing is consistent with the general purpose of bankruptcy petitions, which is to stop aggressive debt collection efforts and to give you an opportunity to make decisions about your debts without being influenced by relentless pressure from your creditors.
How Does a Bankruptcy Lawyer Help with Reaffirmation Agreements?
Experienced Chapter 7 bankruptcy lawyers, like Reed Allmand, can evaluate your complete debt picture and advise you on the best ways to use a reaffirmation agreement to keep your car, house, or other critical asset in Dallas. When these agreements are formed and administered properly, and you continue to make on-time and regular payments toward the debts they address, he can verify that those payments are properly reported to credit bureaus, which enables you to rebuild your credit rating and reduce some consequences of your Chapter 7 filing.
Call Us for Help With a Reaffirmation Agreement in a Chapter 7 Dallas Bankruptcy Case
Navigating reaffirmation agreements without the help of legal counsel can be difficult and frustrating, given the nuances in the law. Please call Allmand Law Firm for advice and information about reaffirmation agreements in Dallas Chapter 7 bankruptcy. We focus on helping good people get a fresh start with strategic bankruptcy plans.
