As I always explain to my clients, there are definite rules and date specific deadliness when you file Bankruptcy.
There are many clients who file for bankruptcy and want to continue to keep their car. If that is the case, you can reaffirm your debt by signing a reaffirmation agreement.
However, it is imperative that this agreement is completed while your Chapter 7 Bankruptcy is still open and ongoing – not after you are discharged of all your debts in Chapter 7.
In a recent case, the bankruptcy court ruled that the Debtor could not reopen her case so that she would not lose her car.
- Debtor did not reaffirm the car loan while in Chapter 7 Bankruptcy.
- Debtor asked the court to waive the statutory rule and allow her to reopen her case and fill out the necessary paperwork to reaffirm her car debt.
- Bankruptcy Court could not vacate the Debtor’s discharge – “no matter how well intentioned the reasons presented for doing so.”
- Both the Statute and applicable case law make it clear that a reaffirmation agreement not made before the granting of a discharge will be unenforceable.
As always, it is important to have an experienced Bankruptcy attorney review your case and work closely with you on your case. No client of mine has ever lost their car unless they wanted to.