Wells Fargo Reaffirmation Agreement: What You Need to Know
If you have a loan or mortgage with Wells Fargo and you`re not able to keep up with the payments, you may receive a document called a “reaffirmation agreement.” Reaffirmation agreements are legal contracts that allow you to keep your secured debt, such as a car loan or mortgage, even though you`re filing for bankruptcy.
But what exactly is a reaffirmation agreement, and how does it work? Here`s everything you need to know.
What is a Reaffirmation Agreement?
A reaffirmation agreement is a legal contract between you and Wells Fargo that allows you to keep your secured debt even though you`ve filed for bankruptcy. It essentially re-establishes your obligation to repay the debt, and you`ll continue to make payments just as you would if you hadn`t filed for bankruptcy.
Why Sign a Reaffirmation Agreement?
While signing a reaffirmation agreement means you`ll continue to be responsible for repaying the debt, it also means you`ll be able to keep your property. If you don`t sign a reaffirmation agreement, Wells Fargo may be able to repossess your car or foreclose on your home, even if you`re current on your payments.
Additionally, signing a reaffirmation agreement can help you rebuild your credit more quickly after bankruptcy. When you continue to make on-time payments, it demonstrates to potential lenders that you`re responsible and can handle debt.
How Does a Reaffirmation Agreement Work?
When you file for bankruptcy, Wells Fargo will notify you if you have a secured debt that`s eligible for reaffirmation. If you choose to reaffirm the debt, you`ll need to sign a reaffirmation agreement. The agreement will outline the terms of the debt, including the interest rate, payment schedule, and any fees associated with the loan or mortgage.
Once you`ve signed the reaffirmation agreement, it needs to be approved by the bankruptcy court. If the court approves the agreement, you`ll be responsible for continuing to make payments on the debt just as you were before you filed for bankruptcy.
In some cases, the court may not approve your reaffirmation agreement. This could happen if the court feels that the debt is not in your best interest or if the payments would cause undue hardship. If your reaffirmation agreement is not approved, you`ll need to surrender the property associated with the debt to Wells Fargo.
Conclusion
If you`re considering filing for bankruptcy and you have a secured debt with Wells Fargo, it`s important to understand how a reaffirmation agreement works. While signing a reaffirmation agreement means you`ll be responsible for continuing to make payments, it also means you`ll be able to keep your property and potentially rebuild your credit more quickly.
If you have questions about reaffirmation agreements or need assistance navigating the bankruptcy process, consider consulting with a bankruptcy attorney or financial advisor.