If you finance a home, vehicle, or personal property such as jewelry, furniture, or tools, you must decide whether or not to reaffirm the debt secured in your property.
Colorado Law Group will inquire about your desire to reaffirm your secured debts and indicate your answers on the debtor's statement of intent which is part of your bankruptcy petition and schedules.
It is not unusual for bankruptcy filers to reaffirm a debt and then become unable to make the monthly payments on that debt. Should that happen, you must consult with your attorney immediately to check whether the reaffirmation agreement could be rescinded. The deadline to rescind is 60 days from the date of the agreement or its filing with the court, whichever is later.
If the deadline to rescind has passed, you would remain liable for the debt as if you never filed bankruptcy. In most cases the financed property will be repossessed and sold in auction to pay the loan. Should the auction proceeds fail to satisfy the loan, the creditor will attempt to collect from you the deficiency on the loan i.e. the amount that is outstanding after the sale of the property.
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