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Gee, I Hate Reaffirmations! I Hate Reaffirmations in the Morning, Evening, and Suppertime! I Hate Reaffirmations ALL the Time!

By Joseph McDaniel, Esq.

Let's talk about reaffirmations for a little while.

Only a little while, though. They make me sad.

See, a reaffirmation is a bankruptcy specific agreement, inside your bankruptcy, that you will repay a debt according to its terms, and re-establishing your personal liability on that debt.

Just so you know, the entire reason you filed your bankruptcy is because you were looking for your bankruptcy discharge here in Arizona, to get rid of your personal liability!

Do you begin to see why I have a problem with reaffirmations? We're doing everything we can to make your personal liability go away in your bankruptcy, and here we are reversing course and making you personally liable again!

Makes no sense, right?

Well, here's a short video about reaffirmations in Arizona:



Turns out that in some very specific situations, after serious discussion, it might make sense for a debtor to sign a reaffirmation agreement. On a car, for instance.

Almost never makes sense with an unsecured debt, of course, unless its in settlement of a Complaint to Determine Discharge.

But I'll discuss that in a forthcoming educational video about bankruptcy law and procedure in Arizona; for now, understand that I don't like 'em, and after you get to know reaffirmations, you won't like 'em much either.

My big preference for any consumer debtor case (business bankruptcy cases are different, of course) is to keep all the exempt stuff, as well as the worthless and overencumbered stuff, and dump all the dischargeable debt.

Most debt gets scraped off in a consumer bankruptcy case in Arizona, of course; and some won't get scraped off, as frequent readers know.

After all, if you don't list a debt in a timely fashion, you probably won't scrape off that debt. So list all your debts! And some debts won't get scraped off anyway, like most tax debts, and most alimony and child support, and most student loans (although there is some pending legislation that could change a little of that).

So maybe you'll wind up signing a reaffirmation agreement agreement in some cases. But not often!

In the good old days, prior to the 2005 Amendments, we could routinely use a simple ride-through instead of a reaffirmation.

Now?

That would be too easy!


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Full post as published by Arizona Bankruptcy Attorney Blog on September 20, 2010 (boomark / email).