Reaffirmation Agreement: To Sign or Not to Sign

What happens if I don’t sign a reaffirmation agreement on a secured debt?

Typically when a debtor does not sign a reaffirmation agreement for a mortgage in a Chapter 7 bankruptcy, the creditor will not repossess the property as long as the debtor continues to make payments.  However, the creditor will cease sending monthly billing statements and most likely stop reporting payments to credit reporting bureaus.  Once the loan is paid in full, the creditor is required to report as such, but until then it is likely no reports will be made to credit reporting agencies.  One of the biggest impacts not signing a reaffirmation can have is that a mortgage company will not refinance the mortgage because the original mortgage was technically discharged in the bankruptcy proceeding.

Whether or not to sign a reaffirmation agreement is a big decision and one that should be discussed between yourself and an experienced attorney.