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Benefit from the Experience of Attorneys Bill and Valerie Sherman Former Assistant Attorney General, Assistant County Attorneys and Magistrate Judge

Should I reaffirm an unsecured personal loan when I file bankruptcy?

Question: Should I reaffirm one of my personal loansif I file bankruptcy? I have a personal loan that I am keeping current and it’s been current for years. It’s with a credit union that my sister works for and where I used to work years ago during a summer break in college. They have a few branches here in North Fulton County. My mom and dad used to bank with them too.

The payment is just $65 per month and is easily manageable, and has been for years. Even when paying other loans and credit cards was challenging, I always paid it on time.

When I spoke with them earlier today they said they could send the necessary paperwork and that it was no big deal to reaffirm the loan. I told them I wanted to reaffirm it but I haven’t signed anything yet. They obviously want me to reaffirm the loan so they don’t lose money.

I really hope I didn't screw things up (I thought it might not be a bad idea to stay in good standing since I don’t know what my credit will be like moving forward). I really didn’t know what to say.

I was researching on the internet and I couldn’t find a good answer to the question. I don’t want to bother you and I’ll pay for your advice. I found your blog and I thought I’d take a shot and ask you. I bet you get a lot of reaffirmation questions.

D.K. in Johns Creek, Georgia

Answer: We have had many credit unions provide reaffirmation agreements for unsecured personal loans for previous clients. It is always our recommendation as Georgia bankruptcy lawyers to avoid reaffirming these debts whenever possible.

Bankruptcy, either a chapter 7 or a chapter 13, is unique in its ability to provide a fresh start. In fact, your credit score should go up after your case has concluded.

To reaffirm liability on a loan to maintain good standing with one creditor may not be your best option moving forward. You have not committed yourself to anything by telling them that you would consider it, so do not worry about that. They will most present a reaffirmation agreement for you to sign and it can be reviewed it with you upon receipt.

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