Timothy J. Sierra, Attorney at Law Trusted Florida Bankruptcy Attorney Since 1987
Call Today For A Free Initial Consultation
813-463-2256

Rebuilding Credit Post-Bankruptcy: What to Do if You're Falling Behind on a Reaffirmation Agreement

Sometimes post-bankruptcy, people who agree to sign a reaffirmation agreement over estimate their ability to live up to the payments agreed upon with a creditor. They tend to find themselves struggling financially to meet these monthly payments. In situations such as this, one should seek rescission or cancellation of the agreement.

A person struggling to meet the payments of the reaffirmation agreement should see if cancellation of the agreement is possible, or if there is a chance the creditor did not properly file agreement with the court; in that case the reaffirmation would be void.

However, these options may not available to the person in the agreement with a creditor, and then the item that was reaffirmed must be surrendered. It is important to check before surrendering the item if the creditor will take back the item in exchange for full forgiveness of debt. It is a long shot for the creditor to agree to such request, but still worth asking. If the creditor does not agree, see if selling the item yourself and setting up a payment plan to pay the debt's remaining balance is an option. There is also a chance the creditor will sell the item in an auction and then the balance of the debt would be the remaining payment. Selling the item yourself rather than the creditor in an auction will get you more money and then that money can be applied toward paying off debt faster.

With the remaining debt, a person should negotiate with their creditor to spread out the balance of their debt, therefore monthly payments are half of what they were under the reaffirmation agreement. Negotiation is key when deciding a payment plan. Do not settle for what plan a creditor puts on the table. As the one making the monthly payments, you have control in the situation, not the creditor.

Through these options one will most likely end up with a mark on their credit report, which does not look great after going through a bankruptcy. However, a 30-day notation is not as harsh looking to future creditors than having many months of 30-day late payments. Therefore finding a solution to get out of your reaffirmation agreement is more beneficial than letting the payments on the agreement get out of hand.

If one does see themselves struggling to make payments post-bankruptcy, they should ask themselves these questions:

1. Are you doing everything possible to rebuild your financial situation?

2. Is there anywhere you can cut back spending, even just temporarily, to save money?

3. What is one thing you can do today to improve your financial situation?

Taking time to ask these questions puts those recovering from bankruptcy back on track to a debt free life.

Works Cited

Ryan, Paula Langguth. Bounce Back from Bankruptcy: A Step-by-step Guide to Getting Back on Your Financial Feet. Tracys Landing, MD: Pellingham Casper Communications, 1998. Print.

No Comments

Leave a comment
Comment Information
  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
More Testimonials
Email Us Today

Schedule A Free Initial Consultation To talk to an experienced Tampa bankruptcy attorney, call 877-492-7449 or fill out the form. All calls are returned within 24 hours.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

We Have Offices in Tampa, Riverview and Brandon For Your Convenience.

Tampa Office
118 South Rome Avenue
Tampa, FL 33606

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Tampa Law Office Map

Riverview Office
6314 U.S. Highway 301 South
Riverview, FL 33578

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Map & Directions

Brandon Office
305 North Parsons Avenue
Brandon, FL 33510

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Map & Directions