Examples Of A Reaffirmation Agreement

-September 19, 2021-

Examples Of A Reaffirmation Agreement

Mike Burroughs

Indeed, the debtor`s situation can be much worse than if the debtor paid higher interest rates for post-petition credits. Take for example a debtor who confirms a debt of 1,500 $US to obtain a line of credit of $2,000 (including the debt of $1,500 before bankruptcy) at 15%. From a purely economic point of view, this debtor would be better able to repay the $1500 of his previous debt and borrow $500 in new loans at 22%. The new confirmation cannot be justified as a negotiation for the debtor. In addition, credit extensions in exchange for confirmations are not necessarily at advantageous interest rates if some lenders continue to charge 21% or more, even in the event of rebuilding. (331) Commission recommendation. All of the above-mentioned reflections were part of ongoing discussions involving hundreds of people during the Commission`s consultation process. On the basis of these considerations, the Commission concluded that current assertion practices are not incompatible with the promotion of Chapter 13 repayment, equal treatment of creditors and financial rehabilitation of debtors. . . .

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