Is It Possible To File A Reaffirmation Agreement After A Bankruptcy Discharge?

Reaffirming debts during bankruptcy is usually not a good idea, because you will continue to be legally liable for them after receiving a discharge. If you decide not to reaffirm an account with a creditor but change your mind after receiving your bankruptcy discharge, you may be wondering if it's possible to still file the paperwork to do so. It depends. Here's what you need to know.

Technically, It's Possible

Bankruptcy procedure requires petitioners to reaffirm debts before the discharge is granted. Once the case has been discharge, it's very difficult to reaffirm a debt.

However, it's not impossible. To accomplish this, you have to reopen your bankruptcy case and file a motion to set aside the discharge. If granted, this motion would put you into a pre-bankruptcy state where all the accounts that were voided are now active, though you would still enjoy the protection of the automatic stay until the case is resolved. During this time, you can file the reaffirmation agreement with the court (which would make you legally liable for the debt after bankruptcy). The court would then issue another discharge and close your case.

The problem is most courts will not let debtors vacate bankruptcy discharges just to file reaffirmation agreements. Some judges may feel this reason is not valid or worthy enough to justify the expense involved going through this process. Others may feel they don't have the authority to allow this maneuver.

A few states—such as New Hampshire and New York—do allow debtors to do this, but you would have to provide the court with a compelling reason. For instance, some lenders will not let homeowners who've gone through bankruptcy refinance their homes without a reaffirmation agreement on file. Depending on the circumstances of your situation, the court may be amendable to letting you reopen your case so you can file the required paperwork for the reaffirmation.

Alternative Options

A bankruptcy discharge prevents lenders from pursing you for debts listed in your schedules. That doesn't mean you can't continue paying on the account though. If you have secured debt like a car or home you're trying to keep from being repossessed, discuss the option of resuming payments with the creditor. Most lenders would rather have the money than the property and may be willing to go along with this arrangement. Be aware, though, that the creditor may be more aggressive about taking the property back if you miss payments, because it can't do anything to collect the money owed.

For more information about or assistance with reaffirming debts, contact an attorney, such as Demers Gagnier Inc.