QUESTION
Can I reaffirm the debt in a bankruptcy so that the loan can survive the discharge?
Asked on Aug 16th, 2011 on Bankruptcy - New York
More details to this question:
I am being forced to file bankruptcy because I am being sued by a bank for the deficiency on a lot that I could not continue making payments on. I lost a home and rental house to foreclosure as well. We have lost everything because I used up everything to keep making payments my 2.7 home sold for 800k and I have to file. I know I will lose my home here. I borrowed money from someone to pay bills and gave them a lien on some stock to secure the debt. Can I just reaffirm the debt in bankruptcy so her loan would survive the discharge of debts. It is only one share of stock and I can't sell it so I did this, what do I do? I dont have anything else to give them as collateral. Please help, thank you. My husband and I are 62 and 65 and have not worked in twenty years because of selling my business for a lot of money but we put everything in the market real estate and lost it all. Thank you so much.
9 ANSWERS
Samuel Lee Tucker
You can probably not reaffirm this type of debt. Do you want to keep the stock? Why can't you sell it? Do you want to pay the holder of the debt because of personal relationship? This information is necessary to fully answer your question.
Answered on Aug 19th, 2011 at 8:29 AM
Debtor's Rights Attorney serving Atlanta, GA
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Theodore N. Stapleton, P.C.
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Yes you can. I am happy to discuss these issues with you.
Answered on Aug 18th, 2011 at 2:00 PM
Spencer Hale
There are a few issues here: 1) You may have a defense to the deficiency lawsuit through Arizona's anti-deficiency statutes.
Answered on Aug 18th, 2011 at 12:49 PM
judith runyon
The court has to approve any reaffirmations of debts in bankruptcy. Doubt if the court would approve it.
Answered on Aug 18th, 2011 at 10:44 AM
Daniel James Wilson
When you file a petition in bankruptcy your schedules must list every asset and every debt. Your debt to your friend will have to be listed and will be discharged. However, there is nothing to prevent you from paying the debt after your case is closed. You say you gave a "lien" on some stock. Did you record this lien? If so it might be a secured debt. I caution you not to repay this debt before filing bankruptcy. This would be a preference that the trustee would be able to avoid (recover). Your friend would have to give the money to the trustee.
Answered on Aug 18th, 2011 at 10:38 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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I suppose you could sign a reaffirmation but why bother? There is no law against your paying a discharged debt after bankruptcy. The law only forbids their collection efforts to compel payment. It would not be wise to give them stock as collateral before filing bankruptcy as a Trustee would likely simply sue them to retake the collateral as a voidable preference.
Answered on Aug 18th, 2011 at 10:07 AM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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You should carefully consider whether to reaffirm a debt. Without reaffirmation you are still allowed to pay any of your debts. The difference is whether you default. If there is a reaffirmation agreement you would be liable if you breach to pay the entire amount. If there is none, you can stop payments at any time without owing anything that is left.
Answered on Aug 18th, 2011 at 5:46 AM
Glen Edward Ashman
NEVER reaffirm debts like that. First of all the court will likely refuse to approve it. And your lawyer will certainly tell you a strong "No" and will refuse to sign consent. Once you reaffirm, you have to pay even if you can't. There is nothing that stops you from a voluntary repayment after the case is over. Just don't sign anything. Discuss this with your lawyer (and don't think of making the catastrophic mistake of filing without a lawyer).
Answered on Aug 17th, 2011 at 2:20 PM
You need to call an attorney right now. That just "one share of stock" is certainly piquing my interest and you can be sure the bankruptcy trustee will ask about it. It is security for a loan so certainly has some value. So the question is, is there any nonexempt EQUITY in the "just one share of stock". DO NOT TRY TO HANDLE THIS YOURSELF - GET AN ATTORNEY.
Answered on Aug 17th, 2011 at 1:27 PM