If you are going to file for bankruptcy, you are likely to be looking for ways to keep the property you own. This is where
reaffirmation or redemption comes into play. So which is the right one for you? For example, if you own a business, you cannot redeem the property in your bankruptcy case. If you have an auto loan that you want to refinance, you will also need to be aware of this. In addition, if you have personal property that is used primarily for household purposes, you will probably not be able to redeem it.
Reaffirmation vs redemption due
When deciding between a reaffirmation and a redemption, you should consider the benefits and drawbacks of each. You may be tempted to keep your house or car, but if you can get your financial house in order, you might find a reaffirmation to be the best option. In addition, you should be sure to check with your bankruptcy lawyer to make sure you are on the right track. In many cases, you will have to file for a Chapter 7 and wait a couple of months before you can actually redeem your possessions. If you can’t wait that long, you might want to look into a repayment plan.
A reaffirmation is a legal agreement that reaffirms your personal obligations to your creditors, but doesn’t actually require you to make payments. In the past, you could use a blanket security interest on your cash register receipt to help leverage your repayment commitments. However, the modern bankruptcy law enacted in 2005 prevents this sort of maneuver. A reaffirmment will allow your creditor to sue you for nonpayment, but it doesn’t let you keep the property. To put it into perspective, a reaffirmment could cost you thousands of dollars in attorney’s fees.
On the other hand, a redemption will let you keep the vehicle of your dreams, but it will also take a lot of legwork and patience. If you have a vehicle that you just can’t afford to repair or resell, you should consider a filing a redemption. Likewise, if you can’t make your minimum payment on your mortgage or auto loan, you should also consider a debt consolidation. If you have a good idea of how much you can reasonably repay your creditors, you should have no problem negotiating a satisfactory repayment arrangement.
Redeeming personal property used primarily for household purposes
There are numerous factors that go into deciding if you should file for bankruptcy. One of the best ways to find out if you are eligible is by taking a debt inventory. This can be done online or by having your own lawyer go over your financials. If you do opt to file for bankruptcy, you may want to consider using a reputable debt consolidation firm to help you navigate the minefield. A good credit counseling firm will also be able to give you advice on how to properly handle your debts and stay out of trouble. After all, no one wants to get into debt again in their later years. A good credit counselor will also be able to tell you if you can take out a loan or not. If you can’t take out a loan, you may be able to file for bankruptcy and still keep your property. If your case is accepted, you may be able to get out of debt in less than a year. The process isn’t as daunting as it sounds.
Refinancing your auto loan in bankruptcy
If you have filed bankruptcy, you can still get a car loan, though it can take more time. It is a good idea to shop around for the best deal before you take out the loan.
If you are behind on your auto loan payments, you may be able to work with your lender to re-negotiate your terms. It is important to explain your situation to the lender and to show them a plan for continuing to make payments.
In addition to getting a better interest rate, you can also find a larger down payment, which can lower your monthly payment. If you refinance your auto loan after bankruptcy, you can save money in the long run.
If you have a car that is more than five years old, you may want to consider filing for Chapter 13. This type of bankruptcy can affect the terms of your auto loan, and you can lose your vehicle if you do not pay it off.
If you have a positive credit history, you may qualify for a lower interest rate. You can also check with your local credit union for options. Those that are member-owned are likely to offer lower rates, but you will have to meet their requirements.
There are also some options for those with no credit or a bad credit score. Companies like Auto Credit Express can help you get the money you need. They are dedicated to helping people with credit problems.
In addition to working with banks, you can refinance your auto loan with a credit union. Credit unions tend to have stricter loan requirements than banks, but they may be more willing to approve your application.
The best thing to do is to find out what your current credit score is and then shop around for the best deal. If you have a low credit rating, you may want to keep your current car until your credit score improves. Once your credit score improves, you can take out a new loan and refinance your existing one.
Business property not eligible for redemption
If you have been thinking about reclaiming your property in a bankruptcy, you should know that there are certain restrictions in place. For example, you cannot redeem business property in a bankruptcy. However, there is still some relief available to you. You can redeem personal property. This includes vehicles and household appliances. If you have a secured claim, you can redeem an item that you have lost in a Chapter 7 bankruptcy.
In addition, you can redeem an item that you have gained through a reaffirmation agreement. When you reaffirm, you commit to the post-bankruptcy debt. You can reclaim an item if it has been abandoned by the bankruptcy trustee. But it must be an exempt property.
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