January 14,2007
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A Fresh Start After Bankruptcy: Part 2 of 4
It's a popular and tenacious misperception that bankruptcy is truly as "fresh start" in and of itself. Sure, it's the only way to rid yourself once and for all of the burden of crushing debt. However, bankruptcy carries stigma and prejudice long after the period of actual judgment has passed. This series offers steps by which smart consumers can assure that they do, in fact, get the clean start that bankruptcy can mean.
Our second featured step is: reaffirm your car loan. If you have a car loan, and are planning to carry it through, you will want to sign what is called a "reaffirmation" with your lender. Basically, this document is your statement that you intend to keep up payments, even in light of other financial hardships. This is a good-faith measure on your part, and should but you the leeway you need with your lender to keep your vehicle. Keep in mind that you will be expected to keep up your payments, with very little opportunity for flexibility or slip-ups. And, most importantly – do not sign a reaffirmation if you are planning to give up your car. If you do, you will be held responsible for the full unpaid balance of your loan.