Does reaffirming help credit?

Reaffirming Helps Rebuild Your Credit So timely payments won’t help you establish a good credit history after bankruptcy. If you reaffirm the loan, your lender will continue reporting payments.

What does reaffirmation of debt mean on credit report?

When you reaffirm a debt, it means you enter into an agreement with your lender to continue to making payments on the account rather than including it in your bankruptcy.

Why would someone choose to reaffirm a debt?

Reaffirming a debt allows you to keep the property securing the debt, which can be a real advantage in some cases. It also allows you to avoid having to come up with a lump-sum payment to keep the property.

Can I reaffirm debt after discharge?

Secured debts like mortgages are still debts and therefore can be discharged through bankruptcy. But, the only way to keep the item securing the debt is to continue to pay for them. Reaffirmation agreements for mortgages are possible, but not necessary. They are, however, always subject to court approval.

What happens when you reaffirm a debt?

Reaffirming a debt informs the lender that you intend to continue to pay the loan. Generally, the lender will continue to report the loan and all payments made on that loan to the credit reporting agencies, which may help improve your credit score after bankruptcy, provided timely payments are made on the loan.

Can I refinance if I did not reaffirm my mortgage?

The truth is that you do NOT have to reaffirm your loan to refinance. There is no law that says anything like that. The hurdle is not a law, it is just the bank’s policy. They may have chosen not to offer to refinance to people who chose not to reaffirm.

Should I do a reaffirmation agreement?

Reaffirmation agreements are strictly voluntary. A debtor is not required to reaffirm any of his or her debts. If a debtor signs a reaffirmation agreement, the debtor agrees to pay a debt that otherwise might be discharged in his or her bankruptcy case.

How long do you have to wait to refinance a house after bankruptcies?

4 years
Government mortgage financiers Fannie Mae and Freddie Mac dictate their minimum requirements for lenders offering conventional refinance loans to homeowners after bankruptcy. They require lenders to wait 4 years after a debtor’s discharge date for a conventional loan.

How long do you have to wait to refinance a house after Chapter 7?

Conventional mortgages: In most cases, you must wait four years from your bankruptcy discharge date before you can apply for conventional mortgage refinancing if you filed for Chapter 7 bankruptcy protection. Under extenuating circumstances, however, that waiting period may decrease to two years.