Just like thousands, do you also want to negotiate a reaffirmation agreement? Reaffirmation agreement in Chapter 7 bankruptcy helps you keep your secured properties for less. Here are some ways to avail some great deals while reaffirming your car loans and other kinds of debts.
Individuals who have debt secured by property and want to reaffirm, file for Chapter 7 bankruptcy. In bankruptcy modus operandi, you have three recourse to take care of your secured debts. You can either give up the property, redeem (pay the market value of it), or reaffirm the debt (agree to be responsible for the debt even when the bankruptcy is discharged).
Reaffirmation agreement in bankruptcy is a complex procedure and should not be taken lightly. Make sure you understand what it actually is before you go for it.
However, if you are serious about it and want to do it, you can get some good deals by negotiating with the creditor. Here is how.
Negotiating the reaffirmation of a car loan: If you reaffirm a car loan, you are supposed to get a loan term other than your existing one. First, check the kind of loan you’re presently having. If it’s a ‘purchase money’ loan, the deal you might get would be slightly better than your existing one. However, if you currently have a ‘non-purchase money’ loan, you might be able to save good.
While going ahead with a reaffirmation agreement, the first thing you need to do is to request the lender to reduce both the outstanding balance and interest of the loan. The lender would obviously come back with a counter offer. So it’s best to start your offer much less than what you are actually willing or able to pay.
Now here comes the master tip. Non-purchase money lenders never want to repossess your car unless you leave him/her with no other fair alternative. Perhaps your lawyer too knows all these tricks. Ask him or her to tell your lender that your car is in an awful mess and letting the buyer pay something for it than simply giving it up would be a far better option. If you have kids, then you can tell the lender than these tiny tots have vomited and urinated on the floor carpet and upholstery and the interior is not a good place to spend time. Also remind the lender that you will get tons of new offers from car dealers across the country once the discharge is granted.
The more willing you are to surrender your item, the better the chances are to get a good deal. This is true for cars, jewelry, electronics and any other kind of personal property. This strategy goes well with electronics and furniture, which virtually have zero resale value.
Chances of getting great reaffirmation deals on jewelry are very likely. If you go to a pawn shop, you’ll manage to get only ¼ of your jewelry’s value (doesn’t matter if you have bought it from a big shopping mall.) If you want to try out, just go to the nearest pawn shop with your best possessions and see how much do they offer. Once you are aware of the street value of your jewelry, you should not have any difficulty negotiating a figure that is half the amount you still owe.
In order to get a good reaffirmation deal on furniture, go ahead with the same strategy that you could use to reaffirm non-purchase money car loans. The older the furniture is, the better the reaffirmation deal you could have.
Would you like to keep your furniture for free? Tell your lender that you’re willing to surrender it because your kids have left it in a poor state. Though you’re risking the stuff altogether by telling the same to your lender, chances are there that you’ll keep it. Lenders seldom repossess household goods because the street value that they’d get, would be much less than the cost of logistics and storage. Don’t panic even if the lender tells that he/she would pick up the furniture since often they just do it to scare you.
Old computer and other electronics equipment worth nothing and you can get good reaffirmation agreement on them. However, if the items are less than one year old, then the lender might want to repossess.
As with any other type of item, you could just go ahead and ask your lender to come and pick the item. The lender would ask you to bring the item back to the store. Never do it. Bankruptcy requires you to offer to surrender the secured item to the lender if you don’t work out a reaffirmation agreement. However, you’re not legally bound to submit the item with the lender. If the lender wishes, he/she can come to your place and haul the item away. And, like anything else, chances are there that the lender won't show up - unless the product is pretty new and in working condition.