Reaffirm or Not Reaffirm..that is the question!!

Anonymous · ‎04-21-2009

Hi. You guys have been so helpful to me in many other credit related situations and I thought I would come and get more of your great advice. I recently filed Ch 7 and am considering reaffirming on a cc with one of my creditors that I owe $3100. I am considering this because this is my oldest credit card and I thought it would be helpful to me in rebuilding. Also, I have had this card for 15 years and this creditor has always been considerate when I ran into hard times. Of all my creditors (and there were many) they are the only ones who were willing to work out repayment terms when the others just wanted me to pay,pay, pay. So, I guess I feel an allegiance of some sorts to them.

I recently received a notice from them that my interest rate would change based on my credit score effective July 1st. I called their collections VP and discussed this with him. He said that the reaffirmation agreement would have my current interest rate 11.9 and the increased rate that could go up to 29.99 based on score would not apply to me. I have reservations about this.

What would stop them from increasing the rate in the future after the agreement is signed.They said they wouldn't but I am leery of this in this credit market.

Does my current rate of 11.9 only apply to the balance owed and not to new purchases which would have the increased rate. The VP never answered this question. Again, I am leery.

I guess if I have to ask all of these questions and have a bad feeling in the pit of my stomach I shouldn't do it, huh?

Just want to hear what you guys have to say.

THANKS!!!!!

Missy

Anonymous · ‎04-26-2009

Missy I would not do this not for one second now if you were talking about a car I will still not reaffirm and I will tell you why.

If you reaffirm the credit card they can give you any interest after the bankruptcy, if they can put it in writting they will not higger the interest then I guess it would not be such a bad idea but I really doubt this will happen.

The only ones that will win is them in the end. After you are discharged you will have a second chance to rebuild your credit I know how you feel I was in the 700's and before bk was in the 400's now I am in the low 600's so there is hope but I did not reaffirm anything you are having this 10 year black mark on your credit already and you want to be a debt free as possible, now if you have a macy's card with a zero balance or get added as a authorized user on a friend or relatives credit card you will be fine when you finally discharge, message me if you need more advice.

Good luck!

Anonymous · ‎04-27-2009

There is no guarantee the creditor will leave your account open. Reaffirming just means you do not include it in descharge and you carry the debt through. Once you reaffirm, they can close the account, raise the rate and require you to pay it and you have no BK protection, UNLESS you obtain some written agreement or offer.

Do not rely upon ANY verbal representation. Assume worst case scenarios in all cases except those in writing. My brother had a BK in 2000. Sears "forgave" 70% of his debt and reduced his CL to $750 (from much higher) and upon reaffirmation they kept the account and still have it to this day. But the offer was in writing.

In my BK, I reaffirmed a USAA Visa. After BK discharge, they closed the account and just collected the payments till paid off. The only saving grace was that it was not IIB in remarks and thus was not a derogatory account. But it fell off my report 10 years later because it was closed, so it doesn't help me now that BK is gone. It helped some for the 10 years it remained.

The point is, you need to determine your income, ability to pay and what you wish to accomplish. And get written offers if you want to keep the account in open status. Also, you should discuss with your attorney.

Good luck.