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What does it mean to reaffirm a car loan?
I'm going into bankruptcy and my attorney told me I may need to reaffirm my car loan. I'm really not sure what this means, though, or even where to start. What is reaffirming a car loan, and how do I do it?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m really sorry to hear about your misfortune. Reaffirming a car loan is an agreement with your lender that reaffirms that you will pay the
car loan
, just as you would have if you hadn’t filed for Chapter 7 bankruptcy.Reaffirmation on a car loan is entirely voluntary. Typically, you need to show that your car is a necessity and not a financial burden on your household. While it will put you on the hook for any future payments on your loan, if you don’t reaffirm, you may have to surrender the car as part of your bankruptcy filings.
If you decide to reaffirm the car loan, remember that you’ll still need
car insurance
as stipulated by your car loan agreement.To save money and relieve some of the stress of coming out of bankruptcy, use the
Jerry
app—we’ll get you personalized quotes from top insurers in seconds, so that all you need to do is pick the plan that works best for you.Best of luck with everything, and here’s hoping your fortune turns around soon.
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- Gregory R.
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