{"id":2167,"date":"2019-08-11T16:01:06","date_gmt":"2019-08-11T16:01:06","guid":{"rendered":"https:\/\/recoverylawgroup.com\/?p=2167"},"modified":"2025-08-11T09:50:27","modified_gmt":"2025-08-11T09:50:27","slug":"loan-agreement-that-was-discharged-in-bankruptcy","status":"publish","type":"post","link":"https:\/\/recoverylawgroup.com\/staging_D\/loan-agreement-that-was-discharged-in-bankruptcy\/","title":{"rendered":"Clause For Refinancing a Loan Agreement That Was Discharged in Bankruptcy"},"content":{"rendered":"

When a person applies for bankruptcy under chapter 7, in Los Angeles, most debts are cleared. The debtor is no longer obliged to the creditors. However, a debtor can keep a loan agreement if he\/she wills to save that particular property. Usually, all the property and valuables are sold to clear the debt under chapter 7. If the debtor wants to retain any property, be it their house or car; they can continue to follow the loan agreement towards that house to the creditor. For more advice do log in to Recovery Law Group<\/a>.<\/p>\n

Reaffirmation <\/strong><\/p>\n

The process of retaining the mortgage is called reaffirmation. When a debtor reaffirms a debt, he\/she affirms to owe the debt after the bankruptcy case ends. The debtor is under the same contract with the creditor and continues to pay the same installments against the mortgage. The loan agreement between the debtor and creditor will behave in the same manner and will not be likely affected by the bankruptcy case.<\/p>\n

The creditor can seize the property if the debtor fails to repay the loan if he\/she reaffirms a loan agreement. On the contrary, the creditor can have no effect whatsoever on the debtor if he\/she does not reaffirm a mortgage. Hence, it\u2019s advisable not to reaffirm a mortgagee, whilst filing a bankruptcy case under chapter 7.<\/p>\n

Can a debtor Refinance a loan that is not reaffirmed?<\/strong><\/p>\n

Not reaffirming the mortgage and still upholding the discharged loan, the debtor cannot ask the creditor to refinance his mortgage. Once the debt is discharged, the creditor has no say in the mortgage process. The creditor has to be contented with little or no pay directed by the court. So, if the debtor asks for refinancing a discharged loan to the creditor, it violates the bankruptcy rule. The debtor cannot ask the same creditor for refinancing but can request other lenders to refinance his mortgage.<\/p>\n

Is reaffirmation a viable option to secure a property under debt?<\/strong><\/p>\n

A reaffirmation agreement in Chapter 7 bankruptcy law<\/a> must be approved either by the bankruptcy judge or by the bankruptcy lawyer. However, both the bankruptcy judge and lawyer sways clear off reaffirmation, stating that it may put unreasonable implications on the client. A client can retain his\/her house without the reaffirmation agreement.<\/p>\n