Credit Scores and Reaffirmation Agreements in Minnesota Bankruptcy Law

We get a lot of clients who are concerned about their credit score when they file for bankruptcy in Minnesota. In many cases the credit has already been damaged by late payments and a high debt to income ratio. In most cases filing for bankruptcy will be the easiest way to repair the credit in a few years time. The point of this blog is whether signing a reaffirmation agreement is a good idea when going through bankruptcy. In most cases the creditors are not sending out any reaffirmation agreements in Minnesota. These would probably need to be requested from the creditor. The problem with signing a reaffirmation agreement is that it will count as payments on your post bankruptcy credit history, if you default on those payments, it could set back your credit scores several years. In my experience a lot of clients are better served by not signing the reaffirmation agreements in bankruptcy. Several local credit unions around Minneapolis and St. Paul require reaffirmation to accept payments, my advice is not to use those credit unions to get loans in the first place, they tend to be the most aggressive at collections, should you find yourself unable to pay your bills.