Some of the debts that Florida residents take on are secured by a piece of property that is considered to be collateral for the debt. An auto loan is one example. When a Chapter 7 bankruptcy is filed, those contracts are essentially broken and the lender ma have ultimately the right to repossess the property securing the debt. It might be possible to keep that property by reaffirming the debt, but it would be best to first determine whether that would be in your best interest.
When you advise the bankruptcy court that you would like to retain a piece of property that secures a debt, your income and expenses, along with the value of the item you wish to keep, will be reviewed. If the court approves your request, you can “reaffirm” the debt with the lender, which is normally under the same terms that were in place prior to the bankruptcy filing. The U.S. Bankruptcy Code gives you 60 days to change your mind, and it makes sense to take that time to be sure it is the right financial decision.
Just because you can reaffirm a debt does not mean that you should. A thorough review of your current and (potential) future financial situations could reveal that keeping the piece of property in question might not be beneficial down the road. The goal of any bankruptcy is to come out on the other side with a clean slate and a fresh start financially, which could be inadvertently sabotaged by retaining certain pieces of property.
Attempting to conduct this review alone could be a disservice to your future financial goals. A Florida Chapter 7 bankruptcy attorney can provide you with the information you need in order to make an informed decision. He or she can make recommendations, though the final choice is yours.
