A debtor in a bankruptcy may have an asset which is subject to a security interest. The asset, commonly a motor vehicle, is security for a loan, so the vehicle can be repossessed if payments are not made.
A Reaffirmation Agreement is an agreement between a debtor and a creditor, which is filed with the Bankruptcy Court. With a Reaffirmation Agreement, a debtor is agreeing to pay off a particular debt owed to a creditor, although the debt would normally be discharged in bankruptcy.
The 2005 Amendments to the Bankruptcy Code change the requirements to keep such property.
There are two requirement:
- Under Section 521(a)(2)(A) to a debtor has to state his or her “intention with respect to the retention or surrender of such property and, if applicable, specifying… that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property.”
2. To comply with section 521(a)(6),9 the debtor must enter
into a reaffirmation agreement in order to “retain possession” and for the automatic stay to remain in effect. Similarly, under section 362(h)(1)(11) in order for the automatic stay to remain in effect, the debtor again must enter into a reaffirmation agreement
At least according to one Court, even if a Court fails to approve the Reaffirmation Agreement, as long as a debtor properly files a Statement of Intention and Reaffirmation Agreement, a bankruptcy automatic stay applies (which limits a creditor’s ability to repossess personal property). See In re Baker, 400 B.R. 136 (District of Delaware, 2009).
If you have any questions concerning bankruptcy, please feel free to contact.
Attorney Robert M. Singer
2572 Whitney Avenue
Hamden, CT 06518
203-248-8278
rsingerct@yahoo.com
Serving Hamden, New Haven County and all of Connecticut