Question: Should we affirm our property after filing for bankruptcy?
Don’s Answer: In my opinion, DO NOT REAFFIRM.
To reaffirm your property in a bankruptcy means you legally confirm to continue making payments on a loan in order to keep certain property. However, reaffirmation removes that asset from the protection of the bankruptcy and if it gets lost, stolen, destroyed, or you are unable to make payments, you are still liable for the loan.
For most cases I recommend “Retain and Pay”. Which allows you to keep (retain) a secured asset (like a home or car) and continue to make payments (pay) on the loan. It remains protected under your bankruptcy and if lost, stolen, destroyed, etc. you are off the hook. “Retain and Pay” is no different than reaffirmation in regards to losing your property; if you do not make your payments they will take your property. However, if you reaffirm and your property is seized by the lender you are still required to make those payments.
There is an exception in which retain and pay is not an option for some debtors. Some lenders have a clause in their contract that says you must reaffirm in order to maintain your property in a bankruptcy. This clause is usually in the original contract and because you agreed you must abide.