Debt reaffirmation is common in Chapter 7 bankruptcies

These days, debt reaffirmation has become quite common.

When it comes to reaffirming debts, this typically refers to secured debts, such as a mortgage or car loan, not the usual debts of unsecured credit cards or medical bills. Because each person’s debt situation is different, they should consult with a Brandon bankruptcy lawyer to determine if filing for bankruptcy protection is what they need to do in light of their present financial circumstances.

The general rule of thumb in declaring bankruptcy is people should let go of their house if it is clear they cannot afford it. However, if their debts have been wiped out in a Chapter 7 bankruptcy discharge, they may be able to afford a house. It used to be that loan security was to be found in the object – a car or house. These days, lenders seek a debt reaffirmation agreement with a debtor filing for bankruptcy protection. In fact, some bankruptcy trustees demand these reaffirmations be submitted to the bankruptcy court.

Deciding what to keep and what to let go for a Chapter 7 bankruptcy is difficult, and it is for this reason that a debtor would be best advised to consult an experienced Brandon bankruptcy lawyer about their options.  There is a different answer for every bankruptcy case; even more so in today’s shaky economy.

Facing a decision to let go of a home is traumatic, but in some instances, needs to be done. Prior to making that decision though, most bankruptcy attorneys suggest to their clients that they try and foresee the near future, in terms of the value of their property. At the moment, real estate is still on the decline, but does the market indicate a revival around the corner? Decisions like this are difficult to make based on a guesstimate of the housing market.

If the market looks like it will be depressed for some time to come, the best decision may be to let the house go in the Chapter 7 bankruptcy process, but this needs to be discussed with a competent Brandon bankruptcy attorney.

Another item that most bankruptcy attorneys speak to their clients about is buying a vehicle — one that is affordable, particularly if they are deep in debt with their current financing. What happens if they are in a bind financially, and they cannot afford their vehicle any longer, is that the lender usually repossesses it, at their expense. If the bankruptcy has already been discharged, the lender may also choose to pursue legal action to recover damages.

O. Reginald (“Reggie”) Osenton is the Owner and President of Osenton Law Offices, P.A. If you need a Brandon bankruptcy lawyer, Tampa bankruptcy lawyer, or Tampa bankruptcy attorney, call 813.654.5777 or visit