The Reaffirmation Agreement for Stopping Foreclosure

As you may already know, filing for Chapter 7 bankruptcy can temporarily stop your home from being foreclosed on. This is because when you file for Chapter 7 bankruptcy, an “automatic stay” will be issued immediately to prevent creditors (including mortgage lenders) from taking further actions to collect their debts. But after the automatic stay is up, how can you permanently avoid foreclosure of your home? One way to permanently avoid foreclosure under a Chapter 7 is to file a “reaffirmation agreement.”

A reaffirmation agreement is a formal contract made between you and the creditor that states you will pay all or a portion of the money you owe in spite of the Chapter 7 bankruptcy filing. As long as the reaffirmation agreement is followed, you can keep your property or your home after the bankruptcy and the creditor gives their promise to not repossess or take back the property as long as your payments are made per the agreement.

It is important to consult with an attorney before entering into an agreement such as this to ensure that your rights are protected and that it is in your best interest. If you are not represented by an attorney, then you must have a bankruptcy judge approve your reaffirmation agreement. The judge will ask questions to make sure that the reaffirmation agreement does not impose an excessive, unnecessary burden on you or your dependents. If it is determined that it is impossible for you to pay off the debt on your mortgage, a reaffirmation agreement may not work for you.

The experienced bankruptcy attorneys here at Clark & Washington understand the laws governing reaffirmation agreements in Florida. Give us a call today to schedule a free consultation if you are interested in filing Chapter 7 but would like to keep your home in the long run.