Form 240a Sample - Reaffirmation Agreement Page 6
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10Form 240A - Reaffirmation Agreement (Cont.)
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YOUR RIGHT TO RESCIND (CANCEL) YOUR REAFFIRMATION AGREEMENT
"You may
You may rescind (cancel) your reaffirmation agreement at any time before the
rescind..."
bankruptcy court enters a discharge order, or before the expiration of the 60-day period that
paragraph
begins on the date your reaffirmation agreement is filed with the court, whichever occurs later.
should be
included.
To rescind (cancel) your reaffirmation agreement, you must notify the creditor that your
reaffirmation agreement is rescinded (or canceled).
Frequently Asked Questions:
What are your obligations if you reaffirm the debt? A reaffirmed debt remains your
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personal legal obligation. It is not discharged in your bankruptcy case. That means that if you
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default on your reaffirmed debt after your bankruptcy case is over, your creditor may be able to
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take your property or your wages. Otherwise, your obligations will be determined by the
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reaffirmation agreement which may have changed the terms of the original agreement. For
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must be
example, if you are reaffirming an open end credit agreement, the creditor may be permitted by
included.
that agreement or applicable law to change the terms of that agreement in the future under
certain conditions.
Are you required to enter into a reaffirmation agreement by any law? No, you are not
required to reaffirm a debt by any law. Only agree to reaffirm a debt if it is in your best interest.
Be sure you can afford the payments you agree to make.
What if your creditor has a security interest or lien? Your bankruptcy discharge does not
eliminate any lien on your property. A ‘‘lien’’ is often referred to as a security interest, deed of
trust, mortgage or security deed. Even if you do not reaffirm and your personal liability on the
debt is discharged, because of the lien your creditor may still have the right to take the security
property if you do not pay the debt or default on it. If the lien is on an item of personal property
that is exempt under your State’s law or that the trustee has abandoned, you may be able to
redeem the item rather than reaffirm the debt. To redeem, you make a single payment to the
creditor equal to the current value of the security property, as agreed by the parties or determined
by the court.
NOTE: When this disclosure refers to what a creditor ‘‘may’’ do, it does not use
the word “may’’ to give the creditor specific permission. The word ‘‘may’’ is
This Note about
used to tell you what might occur if the law permits the creditor to take the action.
'creditor "may"
do..' must be
If you have questions about your reaffirming a debt or what the law requires,
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consult with the attorney who helped you negotiate this agreement reaffirming a
debt. If you don’t have an attorney helping you, the judge will explain the effect
of your reaffirming a debt when the hearing on the reaffirmation agreement is
held.
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