In a Chapter 7 bankruptcy, you have the option to reaffirm debts. This option is mostly available for secured debts as all unsecured debts are discharged without having to return some form of collateral. Any good Wisconsin bankruptcy lawyer would tell you that it is best to really consider your options before signing a new contract with your old lender.
The main thing to take into account when looking over these reaffirmation agreements is really whether or not you can afford to continue paying this debt while maintaining necessary expenses like food or shelter. Sometimes, it can be difficult to differentiate between the desire to keep a car or a house and the ability to stay current with those payments. You do not have to enter into new contracts to keep property just because you file a Chapter 7 bankruptcy in Milwaukee. Rather, it is possible to keep collateral without signing a reaffirmation agreement as long as you continue to stay current with the debt. Also, by avoiding entering into one of these agreements, you have the option of surrendering the collateral at any time in the future if you find that you just cannot continue to make the payments.
Bankruptcy judges look at these agreements to determine whether or not they think you can afford to keep making payments. If they feel that your income and necessary expenses reflect that any additional monthly payments would prove to be a financial burden, they have the right to call a hearing to address this with you. This is another reason why it is best to weigh the decision carefully before entering into one of these agreements.
Reaffirmation agreements can be very confusing. It is best to talk with an attorney before signing anything to help really determine what is best suited for you. If you file an individual bankruptcy in Wisconsin, you might find yourself looking over these documents with confusion. Read the fine print and consider your options before entering into any new contracts.