Why Reaffirming Debts May Be the Right Move

Apr 28, 2015

When a debtor files for bankruptcy, there is a high probability that their debts will be dismissed. Therefore the creditor can no longer pursue the debts. However, the debtor can still choose to pay the creditor if both enter into a reaffirmation. This creates a new arrangement between both parties which is no longer bound by the previous bankruptcy discharge. It may seem counterintuitive to think that a debtor would want to pay certain creditors if they are no longer obligated to, however there are some legitimate reasons for debtors to continue to pay their creditors.

Keep the Property. Debtors may want to keep the property that is being used as collateral for a particular debt. When a person files for bankruptcy, it is not guaranteed that they can keep the property if the creditor still has a stake in it. By reaffirming the debt, individuals are able to keep the property as long as they continue making payments.

Save the Co-Signer. Reaffirmation may occur if there is a co-signor on a loan who will be responsible for making payments if the debtor does not. Most of the time, the true debtor continues to make payments on the loan because they believe it is the right thing to do.

Non-Dischargeable Debt. If the creditor claims that you misled the organization into obtaining the loan, you may want to continue payments until the dispute is settled, otherwise you may have to pay the whole debt if the creditor wins the dispute.

How Do I Reaffirm a Debt?

The time to reaffirm a debt is short. The arrangement also has to meet certain legal guidelines. Debtors must reaffirm a debt before the court grants a discharge. But creditors may also choose to engage in voluntary repayment. This means you still can make payments on a debt even though you are not obligated to do so. This doesn’t require court approval.

Debt collection can be a complicated issue that consumers may not fully understand. As a result, many consumers default on loans or declare bankruptcy instead of working with collection agencies. Due to high chargeback rates and high customer default rates, collection agencies are considered “high risk” by traditional payment processors and loan organizations. If your company is a legitimate collection agency, eMerchantBroker.com will set up a free collection agency merchant account and low cost account management plans by the most experienced high risk industry professionals in the world.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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