Chapter 7 Bankruptcy Lawyer in Detroit, Michigan

A reaffirmation agreement is a voluntary agreement with a creditor to remain personally responsible for a debt that could otherwise be discharged. Section 524(c) sets enforceability conditions and subsection (k) requires written financial disclosures before signing. A person may consider it to keep an affordable car or other secured personal property while continuing the agreed payments. A lender need not offer better terms, and signing does not guarantee possession, credit reporting or future refinancing. A valid lien ordinarily survives discharge even without reaffirmation. Review the balance, interest, payments, insurance, value and realistic budget before choosing. You are not required by bankruptcy law to reaffirm a debt; choosing not to do so can nevertheless affect your ability to keep collateral.

Reaffirmation keeps an enforceable personal payment obligation if all legal conditions are met. Redemption under section 722 lets an eligible individual keep qualifying personal/family/household tangible property that is exempt or abandoned by paying the allowed secured claim in full at redemption, generally based on the legally determined collateral value rather than automatically the entire loan balance; it is not an installment right. Any new redemption financing has its own costs and risks. Surrender means giving up the collateral through the proper process; any remaining personal debt still needs discharge analysis. Section 524(f) permits voluntary payment without reaffirmation, but paying alone does not recreate discharged personal liability or necessarily protect possession. In Michigan, do not rely on a guaranteed personal-property “ride-through” or “pay-and-drive” option after BAPCPA: the Eastern District district court rejected that approach in Ford Motor Credit Co. v. Hall. Sections 362(h) and 521 can end stay protection after missed duties. Repossession still depends on the contract, applicable nonbankruptcy law and any statutory exception. Real estate and leases require separate analysis.

If effective and not timely rescinded, the reaffirmed personal liability survives discharge. A later job loss or missed payment may allow repossession and a claim for a remaining deficiency after sale, subject to the agreement and applicable law. The debt can therefore undermine a fresh-start budget even if the car was affordable on filing day. Compare the vehicle’s condition, value, insurance and repair costs with the balance and payment. Do not sign merely because a form arrives, to please a lender, or on an assurance that credit scores must improve. Discuss co-signers and proposed changes with counsel. Surrender and redemption have different consequences; none is automatically best for every household.

The attorney who represented you in negotiating reaffirmation must make the applicable section 524(c)(3) certification: the choice is fully informed and voluntary, does not impose undue hardship, and its effects and default consequences were explained. An attorney cannot certify facts the attorney cannot support. Generally, if the income left after the expenses shown on the signed supporting statement is less than the proposed payment, section 524(m) creates a presumption of undue hardship for 60 days after filing the agreement, subject to court extension. A written explanation of additional available funds may rebut it; the court reviews it and may disapprove after notice and a hearing concluded before discharge. Section 524(m) excludes qualifying credit-union creditors. If unrepresented during negotiations, court approval and a hearing are generally required, with a statutory exception for consumer debt secured by real property. An attorney-certified agreement without a hardship presumption does not automatically require the same approval hearing. Follow actual notices; signature alone is not proof of effectiveness.

Under section 521(a)(2), the statement of intention is generally due within 30 days after filing the petition or by the meeting date, whichever is earlier; performance is generally due within 30 days after the first date set for the meeting, subject to authorized extensions. Section 521(a)(6) separately addresses certain allowed purchase-price secured claims and a 45-day period after the first meeting. These periods are not interchangeable. The reaffirmation agreement must be made before discharge under section 524(c)(1); Rule 4008 generally requires filing within 60 days after the first date set for the meeting, although the court may extend filing time. Official Form 427 is the required cover sheet. Court-published B2400A provides the agreement, disclosures, budget and attorney certification; B2400B is a motion for approval where applicable, not a universal substitute for attorney advice. Give every proposed agreement and notice to counsel promptly, and use the actual case calendar rather than calculating a deadline from a website.

Section 524(c)(4) permits rescission by notifying the creditor before discharge or within 60 days after the agreement is filed with the court, whichever occurs later. The 60-day period runs from filing the agreement, not from signing it, filing the bankruptcy petition or attending the meeting. Contact counsel immediately to verify the actual dates and send clear notice to the creditor, preserving delivery evidence and following applicable filing instructions. Do not assume telling the office alone gives the creditor notice. Rescission can remove the reaffirmation’s personal-liability effect but does not erase a valid lien or guarantee that you can keep the car. Obtain case-specific advice before stopping payments, surrendering property or relying on an expired deadline.