A stand-by agreement must be signed within 60 days of the initial meeting of your creditors, unless the bankruptcy court, in its sole discretion, allows a longer period. After signing a confirmation, you still have 60 days to withdraw from it. If you have the misfortune of having a creditor holding your car loan, you still need to analyze whether it makes sense to sign a stand-by agreement. You probably still don`t want to confirm the debt of a pejorative asset like a car and then be held responsible for that debt, even if it collapses or you find that you can`t keep up with payments. However, in certain circumstances (for example. B in the case of a vehicle in which you have equity), this may make sense. 1) The creditor gives you a better deal A reason to sign a stand-by agreement would be for the creditor to agree to soften the pot and make it worthwhile for you to replenish the secured debt. This could be done through a reduced interest rate or a reduction in the balance of principal due. Unfortunately, this is a very unlikely scenario. You should think a lot about whether you should enter into a stand-by agreement.
There are benefits to signing, such as.B. keep your property secure and avoid a lump sum payment. You can also sign an agreement if you have a co-signer for the debt. Perhaps more importantly, it can provide an opportunity to renegotiate and get a lower payment or a better interest rate. The main reason for not signing a stand-by agreement is that it guarantees that you won`t be able to get away from debt in the future. If your Chapter 7 continues to be successfully exempted, you are prohibited from filing another Chapter 7 case for 8 years. If, at any time, you default and the creditor repossess the property, you no longer have it and are still responsible for the difference between the amount of your contract and the value of the item. A stand-by agreement is a contract that you can enter into in which you agree to remain liable for a debt so that you can retain ownership of it. In other words, it`s a promise to pay in exchange for preserving the property you want to keep. To enter into a stand-by agreement, you must be up to date with your payments, and any fairness in the property must be fully protected by your exceptions. As a general rule, stand-by arrangements apply to a car in cases falling under Chapter 7. You should only enter into a stand-by agreement if you have reason to believe that you will be able to repay the balance.
Another way to look at it is not to log out if you could replace the property for less than you owe. 2) Debt includes a co-signer If you have contracted the debt with a co-signer who remains responsible for the loan, for example. B a spouse or parent, you may not want to leave it in abeyance after your bankruptcy. In this case, your moral obligation to your co-signer (i.e., You don`t want to damage or ruin that relationship) outweigh the benefits of bankruptcy, and you can choose to assert your guilt. However, you should know that there is no law against the payment of a discharged debt. So you don`t need to reconfirm the debt to pay it off or pay your friend for it. If you`re bankrupt and considering a stand-by agreement, contact an experienced Colorado bankruptcy company like Wink & Wink to make sure you`re making the right decision. (a) Submission of the Stand-By Agreement.
A stand-by agreement must be submitted no later than 60 days after the first date of the creditors` meeting in accordance with § 341 (a) of the German Code. The stand-by agreement shall be accompanied by a cover page drawn up in accordance with the relevant official form. The court may, at any time and in its sole discretion, extend the deadline for filing a stand-by agreement. On the surface, this may seem like a good reason to assert guilt. However, there are other ways to accumulate loans after bankruptcy, such as .B. on-time payments to student loans, responsible use of secured and unsecured credit cards that you may receive after bankruptcy, and payments for future secured debts (for example. B new car loans). The bottom line is that your loan will improve after bankruptcy, as long as you pay off your future debt on time and never use more than 30% of an unsecured line of credit. Affirmation agreements are entirely voluntary. No creditor can make you confirm a debt. Indeed, reconfirmation runs counter to the most fundamental benefit of filing for bankruptcy: a new beginning. Affirmation agreements may be imposed on a Chapter 7 debtor who wishes to retain personal property that secures a loan.
The personal property guarantee for such a secured loan is primarily a vehicle, but it could also be jewelry. Note that «real estate» or real estate is not personal property and bankruptcy law does not give mortgagees the right to impose a stand-by agreement. Also note that affirmation agreements in Chapter 13 of bankruptcy cannot be taxed at all, a real advantage of Chapter 13. An alternative to an affirmation agreement is to buy back the property for its current value. The catch is that you need to have access to a flat rate that many people don`t have. Either party may file the agreement with the court. Therefore, any party that has more incentive to enforce the agreement will usually file it. In the event that the parties are unable to file a stand-by agreement in a timely manner, the rule gives the court a wide margin of appreciation to allow for late filing. A corresponding amendment to Rule 4004(c)(1)(J) takes account of such an extension by providing for a time limit in the opening of the discharge during the pending request for an extension of the time limit for the submission of a stand-by agreement. Section 524(d) of the Code requires the court to hold a hearing to inform an individual debtor of the grant or denial of release and of the law applicable to stand-by arrangements. The reconfirmation agreement is strictly voluntary and cannot be forced by the creditor to enter into such an agreement.
Each agreement must be concluded and submitted before you receive your dismissal at the end of the deal to be valid. A stand-by agreement creates a new binding contract instead of the original car loan. The reason why a reconfirmation agreement is a potentially disastrous contract for the Chapter 7 debtor is simply this: in the absence of a reaffirmation agreement, if you had problems after the end of your Chapter 7 bankruptcy proceedings and your car payments were in default, the lender could safely repossess the car. The lender always has a privilege over the car. But, above all, they could not sue you for the «lack» between what you owed then and the value of the car. A stand-by agreement creates a brand new binding post-bankruptcy contract that allows the lender to sue the bankrupt in the event of repossession after bankruptcy. .