silver the questions with knowledge Heathe Analyze: Case Problem Blueprint 36.1:

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silver the questions with knowledge

Heathe Analyze: Case Problem Blueprint 36.1: Bankruptcy Due Today at 11:59 PM CDT vonne Brown sought permission of the court to reaffirm a $6,000 debt to her credit union. The debt was no obligation to pay it. The credit union had published the following notice in its newsletter If you are thinking about filing bankruptcy, THINK about the long-term implications. This action, filing bankruptcy, closes the door on TOMORROW Having no credit means no ability to purchase cars, houses, credit cards. Look into the future-no loans for the education of your children. Should the court approve Brown's reaffirmation? 1. Under what Chapter must Yvonne have filed for bankruptcy in order to be allowed to reaffim? Chapter 7 2. Why might a debtor want to reaffirm a debt? to retain possession of collateral in the case of secured debt to maintain a good relationship with the creditor 3. Under what circumstances must 'vonne recelve the court's approval to reaffirm the debt? Select 4. Is there anything improper about the credit union's newsletter? Yes, if the credit union sent the newsletter to Yvonne knowing she had filed for bankruptcy " 5. Will the court be likely to approve this reaffirmation? Select Select

Explanation / Answer

In chapter 7, the debt and creditor can go through reaffirmation agreement as it provides the debtor not to use his personal property rather it provides a guarantee that the debtor's debt to creditor won't be discharged. For the above mentioned reasons, the debtor would want a reaffirmation agreement. It is a re-commitment or reassurance that the debts instead of released will be paid partly or fully. The court will receive confirmation about the agreement if it the debtor was not represented by an attorney and if the agreement has become undue hardship. If the attorney disagrees to sign the agreement or doesn't explain about the consequences and if there is an imbalance in the expenses and earnings. Yes, the court is likely to reaffirm the agreement as the credit union has clearly mentioned that in bankruptcy there is chance of long-term implications and no further loans of any kind.

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