LTrain823 wrote:
Hello everyone, I am meeting with an atty this week and think i have made the decision to file BK. After reading through many posts it seems that i may be a candidate for ch. 7 but even if 13 is all thats available i will go that route.
I have heard the terms re-affirm, discharge and redemption in quite a few posts and i was hoping someone would be kind enough to please explain those to me in as much dummy proof as possible...lol...i am just trying to be as much of a sponge as possible but these have been the only things that i havent been able to understand fully.
Discharge: The legal elimination of debt through a bankruptcy case. When a debt is discharged, it is no longer legally enforceable against the debtor, though any lien which secures the debt may survive the bankruptcy case.
DISCHARGE (also see Non-Dischargeable Debt)
Discharge of debts is the goal of the debtor in a bankruptcy filing. The type of discharge depends on whether the debtor is a corporation or an individual. It also depends on the particular chapter under which the discharge is granted. Unless a specific debt is determined to be non-dischargeable, all of the debtor's debts become unenforceable. If a creditor attempts to enforce payment of a discharged debt, it violates the order of discharge.
Reaffirm: The debtor can chose to reaffirm debts that would otherwise be discharged by the bankruptcy. Generally, when a debt is reaffirmed, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing: the debtor is obligated to pay and the creditor can sue or repossess if the debtor doesn't pay.
REAFFIRMATION AGREEMENT
A bankruptcy discharge eliminates the debtor's personal liability for dischargeable debts. There are times when an individual debtor may want to reaffirm the debt. This enables the debtor to keep property that may be subject to a lien and on which the payments may be delinquent. The creditor may agree to a delay or a modification of the payment schedule in exchange for the debtor's reaffirming the debt. Reaffirming the debt recreates the personal liability and eliminates that particular debt from the discharge.
Since the 2005 Act, the attorney must now certify that the debtor is able to pay off the debt. In addition, before filing the reaffirmation, the debtor must complete a statement disclosing the debtor’s income, the debtor’s current monthly expenses, and the resulting balance available to pay the debt that the debtor hopes to reaffirm. If the income is insufficient to pay the reaffirmed debt, the reaffirmation is presumed to present an undue hardship on the debtor, and such presumption lasts for a period of 60 days from the debtor’s filing of the reaffirmation. The presumption of undue hardship is rebuttable.
Not sure if this is what you are looking for but:
REDEMPTION OF COLLATERAL
A creditor may have a lien on personal property of a debtor where the value of the property is less than the amount due. In that event, the code allows a debtor to pay the creditor the value of the property, rather than the balance due and eliminates the lien from the property.
Google "Bankruptcy Terms" and you will find many sites explaining the terminology. Those above came from 2 different sites.
