What does affirm and reaffirm mean?

[MyFico_704]

I have seen these words mentioned in several posts that I read.  Can someone please explain?

Thanks.

Newbie...

[Anonymous]

affirm and reaffirm are being used for the same thing.  You affirm or reaffirm a debt, meaning that you tell the court and the creditor that you are going to keep paying the debt, and it will not be wiped out by the bankruptcy.  generally only for houses, cars, etc...though sometimes can talk the court into approving an unsecured debt being reaffirmed if there is a co-sigern involved.

REMEMBER, THIS IS NOT LEGAL ADVICE.

[credit911]

This is based off my knowledge from my BK 7 back at the end of 07.

When you reaffirm a debt in your BK it makes you legally liable for paying it again. It is exempt from the rest of the bankruptcy proceedings. The reaffirmation has to be approved by the BK judge.

Example...I wanted to keep my minivan so I singed the reaffirmation agreement, but due to my financial issues at the time the judge denied the reaffirmation (The judge won't allow you to reaffirm a debt if he thinks you will not be able to pay it). At that point Ford could have taken the van back, but I continued to pay them on time every month and they let me keep the van and that was a year and a half ago.

I hope this helps.

[MyFico_704]

Thanks guys!  That explains it!

[Gunslinger4u]

I have a friend in this very same situation.  She set up a reaffirmation with her lender, but the court ultimately did not approve it, claiming it's not in her best interests.  Her lawyers told her that doesn't matter.  I'm concerned that she will keep making payments on the vehicle, then the lender can take it at any time, even if she has it almost paid off!    RIght now, she's probably a couple grand upside down. I advised her to give it back to the lender and allow it to be discharged.  But she loves her truck and doesn't want to give it up, even at $500/month.  I'm just scared they will wait until she pays more down, then snatch it.  What is the legal position on this?  Are my worries justified?

[Woeasmee]

Hi, I can only advises on my recent situation, my BK 7 was discharged 6/12, at the time I informed judge and Cap 1 that I would keep and continue to make payments on my minivan @ $277 monthly.

We now fast forward, 1 year and I'm trying to rebuild credit, clean up credit report, get things going again, as I'd like to buy a house in 2 yrs if possible. I notice that my Cap 1 auto loan is showing as " included in bankruptcy". I'm naturally confused as I've been making the payments, therefore I figured this would be a positive on my CR.

So I call Cap 1 and they inform me that although I kept the minivan, and have continued to make payments and have a good pays as agreed standing with them, the proper paper work was never submitted therefore I didn't legally reaffirm my minivan. They inform me that I am not liable for anything if I decide to stop making payments per the BK -7. More importantly, they would not be able to change the status of my CR, therefore these on time payments haven't helped me in my rebuilding process, well I exaggerate, they have just not as much as I had hoped.

Long story short, I call my credit union, NFCU, and they approve my refinance instantly, therefore I'll have 2 years of credit worthiness with them, btw I received a 2.49 rate, compared to my original 11.99 with Cap 1, lol, all this after BK.

Hope someone gets something positive from my post

[Gunslinger4u]

Good info, thanks!