Creditors love it when people file bankruptcy without an attorney. I was in court the other day and the Judge was holding hearings on "reaffirmation agreements." Reaffirmation agreements are post-filing agreements where you basically incur the debt again that you just protected yourself against in the bankruptcy. They are necessary under the law for personal property such as cars. They are not required in order to keep your home. That is very important.
That means that if you want to keep your car - you must sign one. No problem. But if you want to keep your home, you do not have to sign one. You just keep paying your mortgage and you keep your home. If you default on your mortgage later for some reason, the bank cannot come after you because you have the protection of the bankruptcy discharge. If you sign a reaffirmation agreement, however, you lose that protection and the bank can sue you later and garnish your wages for the judgment.
So, back to court. A nice gentleman who did his own bankruptcy was about $100,000 upside down on his home between his first and second mortgage. The Judge questioned him extensively as to whether he was sure he wanted to sign the reaffirmations given that he was so upside down. (The Judge cannot give legal advice)
The gentleman said he wanted to keep his home and that he wanted to sign them (banks also lie to people and tell them that they have to sign them) so the judge approved them. That man lost the biggest benefit of his bankruptcy discharge on his biggest debt. All because he didn't know the law and how it applies to him. That is the type of creditor that will probably sue him later if he can't make his payments.
He also didn't know one important thing -- he could have gotten rid of the second mortgage entirely! Gone! But instead, he signed up for it again. I hate to see creditors take advantage of people who are not represented by sending them reaffirmation agreements on loans they know do not have to be reaffirmed.
Don't let this happen to you. Filling out the forms is one thing but knowing the law and how it applies to you is the important part.
Attorneys have payment plans and make it easy to be represented through your bankruptcy. Creditors love it when you are penny-wise but pound foolish. Call our office today for a free consultation.