Fillable Form 240a - Reaffirmation Agreement ( (Page 5 of 9) in pdf

Form 240A - Reaffirmation Agreement (Cont.)

YOUR RIGHT TO RESCIND (CANCEL) YOUR REAFFIRMATION AGREEMENT

You may rescind (cancel) your reaffirmation agreement at any time before the

bankruptcy court enters a discharge order, or before the expiration of the 60-day period that

begins on the date your reaffirmation agreement is filed with the court, whichever occurs later.

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reaffirmation agreement is rescinded (or canceled).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

personal legal obligation. It is not discharged in your bankruptcy case. That means that if you

default on your reaffirmed debt after your bankruptcy case is over, your creditor may be able to

take your property or your wages. Otherwise, your obligations will be determined by the

reaffirmation agreement which may have changed the terms of the original agreement. For

example, if you are reaffirming an open end credit agreement, the creditor may be permitted by

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

used to tell you what might occur if the law permits the creditor to take the action.

If you have questions about your reaffirming a debt or what the law requires,

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.

Form 240a - Reaffirmation Agreement ( Page 5