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If the Court denies the reaffirmation agreement, you are in technical default again. This is part of the trade2010off between Chapters 7 and 13. In exchange for a quick, efficient, inexpensive discharge of your debts, you give up control over the actions of creditors.
When making an offer on a reaffirmation agreement, ask the lender to reduce the loan balance and the interest rate. Remember, this is a negotiation. You can expect the lender to come back with a counter offer. So, make your starting offer lower than the amount you are really willing to pay.
An executed reaffirmation agree- ment may be filed by any party, including the debtor or a creditor. It must be filed within 60 days after the first date set for the first meeting of creditors in the bankruptcy case unless the deadline is extended by the bankruptcy court.
Reaffirming the debt gives it new life -- you're once again legally obligated to pay it. If you don't make the mortgage payments, the lender can foreclose and your bankruptcy won't stop this from happening. You'd also still be liable for any deficiency balance after the property's sale.
You can choose to keep the car and continue paying without reaffirming. You take your chances that the lender will repossess the car, but you also keep the benefits of the bankruptcy discharge.