Pittsburgh residents who have found themselves facing financial struggles that they cannot handle and see no other alternative will consider Chapter 7 bankruptcy. For many, this is a wise decision so they can restart their financial lives and move on without the endless worry and creditor harassment they were confronted with at the apex of the situation. However, when deciding to file for Chapter 7, it is important to understand that the entire process is based on liquidation of any property that is of value after which the debtor will no longer be responsible for the various debts. If there are properties that the person wants to retain, it is possible to do so by reaffirming it and paying it.
When reaffirming a debt, the debtor comes to an agreement with the creditor that the debtor will still be liable and pay some or all of what is owed for the item. This is usually a debt that would be discharged with the property surrendered. It can be a home, a motor vehicle and other pieces of property. The creditor agrees not to repossess the property provided the debtor makes the payments. When reaffirming a debt, it is vital to do so before there is a discharge.
With reaffirmation, there will be a written agreement that is filed with the bankruptcy court. There are disclosures that the debtor will agree to when reaffirming a debt. These will tell the debtor how much the reaffirmation will be, its calculation and that it means the debtor will not get a discharge when filing and completing a Chapter 7 bankruptcy. With these disclosures will be a statement of the debtor's income and expenses. This is to ensure that the debtor has the funds to pay for the reaffirmed debt.
Reaffirmation is just one aspect of a Chapter 7 bankruptcy that people might not be aware of when considering the option and moving forward with it. There are many others that should be assessed and understood. A law firm that has experience in helping people who are struggling with debt by advising them and guiding them through the bankruptcy process - whether it is Chapter 7 or another strategy - should be contacted for a consultation immediately.