Can I reaffirm the debt in a bankruptcy so that the loan can survive the discharge? 21 Answers as of June 09, 2013

I am being forced to file bankruptcy because I am being sued by a bank for the deficiency on a lot that I could not continue making payments on. I lost a home and rental house to foreclosure as well. We have lost everything because I used up everything to keep making payments my 2.7 home sold for 800k and I have to file. I know I will lose my home here. I borrowed money from someone to pay bills and gave them a lien on some stock to secure the debt. Can I just reaffirm the debt in bankruptcy so her loan would survive the discharge of debts. It is only one share of stock and I can't sell it so I did this, what do I do? I dont have anything else to give them as collateral. Please help, thank you. My husband and I are 62 and 65 and have not worked in twenty years because of selling my business for a lot of money but we put everything in the market real estate and lost it all. Thank you so much.

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Answer Applies to: California
Replied: 6/2/2013
Lakelaw - Loop Bankruptcy
Lakelaw - Loop Bankruptcy | David Leibowitz
If you have not worked in 20 years and now have no assets, maybe you don't need to file bankruptcy. What is the bank doing to collect? Your social security is exempt. You probably have no assets which are not otherwise exempt.
Answer Applies to: Illinois
Replied: 8/20/2011
Heupel Law
Heupel Law | Kevin Heupel
Your scenario would not prevail as it would be considered a voidable preference in the bankruptcy estate not valid for a reaffirmation. However, other options are available.
Answer Applies to: Colorado
Replied: 8/19/2011
Tucker Legal Clinic
Tucker Legal Clinic | Samuel Tucker
You can probably not reaffirm this type of debt. Do you want to keep the stock? Why can't you sell it? Do you want to pay the holder of the debt because of personal relationship? This information is necessary to fully answer your question.
Answer Applies to: Mississippi
Replied: 8/19/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
Yes you can. I am happy to discuss these issues with you.
Answer Applies to: Georgia
Replied: 8/18/2011
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    You are going to have to consult an experienced bankruptcy attorney about this. But I can give you some general information. All of your debts are usually discharged in a bankruptcy. Your friend's loan will be discharged. You are allowed to pay your friend back after the filing date, but NOT before. If you wish to reaffirm, that is possible, but you do not have to reaffirm to repay your friend. I am concerned that you say that this debt is secured by stock that you "can not sell." That makes it a secured debt that you should talk to your attorney about in detail. For instance, what is the stock worth if it can't be sold? Good luck.
    Answer Applies to: Ohio
    Replied: 8/18/2011
    Jackson White, PC
    Jackson White, PC | Spencer Hale
    There are a few issues here: 1) You may have a defense to the deficiency lawsuit through Arizona's anti-deficiency statutes.
    Answer Applies to: Arizona
    Replied: 8/18/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    When you give someone collateral for for an old debt, just before you file bankruptcy - that is called a "preference." The trustee can set that transaction aside as it is not fair to the other creditors. I assume you are talking about a friend. If was a friend, the trustee can go back a year to set aside such a transaction. I do not recommend "reaffirming" such a debt. It may turn out to be more than you can handle in the future and the point of bankruptcy is a fresh start. If you can pay them after the bankruptcy and want to... that is different. You should see a lawyer because I am concerned about the value of this stock. Make sure you have enough exemptions to cover it.
    Answer Applies to: California
    Replied: 8/18/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    You always have the ability to reaffirm whatever debt you wish. However, it may be better for you not to reaffirm the debt and if you feel strongly about it, pay it outside the Bankruptcy anyway. Do not take on additional debt that you don't have to just in case. You never know whether or not one of you may get sick or hurt and financial circumstances could get dire.
    Answer Applies to: New Hampshire
    Replied: 8/18/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    The court has to approve any reaffirmations of debts in bankruptcy. Doubt if the court would approve it.
    Answer Applies to: California
    Replied: 8/18/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    When you file a petition in bankruptcy your schedules must list every asset and every debt. Your debt to your friend will have to be listed and will be discharged. However, there is nothing to prevent you from paying the debt after your case is closed. You say you gave a "lien" on some stock. Did you record this lien? If so it might be a secured debt. I caution you not to repay this debt before filing bankruptcy. This would be a preference that the trustee would be able to avoid (recover). Your friend would have to give the money to the trustee.
    Answer Applies to: Colorado
    Replied: 8/18/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    I suppose you could sign a reaffirmation but why bother? There is no law against your paying a discharged debt after bankruptcy. The law only forbids their collection efforts to compel payment. It would not be wise to give them stock as collateral before filing bankruptcy as a Trustee would likely simply sue them to retake the collateral as a voidable preference.
    Answer Applies to: Michigan
    Replied: 8/18/2011
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    You have many issues. You should consult with an attorney in regards to the asset and the lien.
    Answer Applies to: Florida
    Replied: 8/18/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Answer Applies to: Maryland
    Replied: 6/9/2013
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    You should carefully consider whether to reaffirm a debt. Without reaffirmation you are still allowed to pay any of your debts. The difference is whether you default. If there is a reaffirmation agreement you would be liable if you breach to pay the entire amount. If there is none, you can stop payments at any time without owing anything that is left.
    Answer Applies to: California
    Replied: 8/18/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    NEVER reaffirm debts like that. First of all the court will likely refuse to approve it. And your lawyer will certainly tell you a strong "No" and will refuse to sign consent. Once you reaffirm, you have to pay even if you can't. There is nothing that stops you from a voluntary repayment after the case is over. Just don't sign anything. Discuss this with your lawyer (and don't think of making the catastrophic mistake of filing without a lawyer).
    Answer Applies to: Georgia
    Replied: 8/17/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    You should not reaffirm debts in bankruptcy. However, after you file, you can repay any debt that you want to if you have the money. The bankruptcy discharge prevents creditors from seeking payment. It does not prevent you from making payments if you want to do so.
    Answer Applies to: Colorado
    Replied: 8/17/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    You can voluntarily repay a debt without signing a reaffirmation agreement. I generally do not recommend that you reaffirm in a situation like yours. If you want to repay the debt after your bankruptcy case you are free to do so. Obligating yourself to repay the debt by signing a reaffirmation agreement is another matter. You never know what the future holds. Don't sign a reaffirmation agreement but repay the debt, if you desire to do so, as you are able to afford the payments.
    Answer Applies to: Alabama
    Replied: 8/17/2011
    Edward Papa, Esq.
    Edward Papa, Esq. | Edward Papa
    You need to call an attorney right now. That just "one share of stock" is certainly piquing my interest and you can be sure the bankruptcy trustee will ask about it. It is security for a loan so certainly has some value. So the question is, is there any nonexempt EQUITY in the "just one share of stock". DO NOT TRY TO HANDLE THIS YOURSELF - GET AN ATTORNEY.
    Answer Applies to: New York
    Replied: 8/17/2011
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    Yes, you can reaffirm, which makes the debt as if you had not filed bankruptcy. You can also pay any debt voluntarily without reaffirming. The advantage there is that if you can't continue making payments you don't have to, but if you reaffirm you are obligated again and can be sued if you don't pay.
    Answer Applies to: Utah
    Replied: 1/21/2013
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