Brief reply: you may typically hold the automobile or residence, as long as you retain paying on the mortgage
Lengthy reply: It’s sophisticated.
Whenever you file chapter, it typically discharges, or wipes out, virtually all your debt. Nevertheless, you may choose and select which secured money owed you’d wish to hold. For instance, if you wish to hold your private home mortgage or your automobile mortgage, you test a field that claims, “reaffirm.” This lets the financial institution know that you simply wish to signal an settlement AFTER submitting the chapter, the place you promise to maintain making the identical funds, stability, schedule, and so on.
I’ve written just a few weblog matters on reaffirmation typically, and people hyperlinks are listed beneath.
In the event you reaffirm the debt, it retains reporting in your credit score, and it’s a must to hold paying on it. In the event you fall behind an face a repossession or a foreclosures after signing the reaffirmation settlement, that debt survives the bk, and so they can sue you for the distinction.
(Sure, you may change your thoughts and cancel or rescind a reaffirmation settlement, in some conditions).
However what occurs should you don’t reaffirm the debt? Usually, you give up the collateral (like the house or automobile). In some conditions, you are able to do a “journey via,” the place you journey the automobile via chapter and hold making funds. They received’t report it in your credit score, however you may hold it as long as you keep present.
Some banks received’t allow you to do a ride-through, and they’re going to nonetheless repossess should you fail to reaffirm.
As for the house, as long as you retain paying on it, it’s yours.
As for “voluntary funds,” properly, they must say that. When the debt is discharged in chapter, they can’t legally gather on it. However should you name customer support and voluntarily make a cost on the mortgage, they’re glad to just accept your cash. That’s why they hold saying, “voluntary.” Nobody is twisting your arm and attempting to gather that cost.
Listed below are just a few weblog articles on reaffirmation, automobiles, properties, and never reaffirming: