What is a reaffirmation agreement?

Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the court. Reaffirmation agreements are under special rules and are voluntary. They tend to be automatically generated and send to the attorney’s office; if not, one can be requested. They are not required by bankruptcy law or any other law. Reaffirmation agreements—

  • must be voluntary;
  • must not place too heavy a burden on your or your family;
  • must be in your best interest; and
  • can be canceled any time before the court issues your discharge or within 60 days after the agreement is filed with the court, whichever gives you the most time.

Reaffirmation agreements usually contain the same terms you agreed to when you first signed the mortgage or car loan and in most cases you do not have to pay more than you are already paying – unless you have fallen behind in the payments.

If you are in individual and you are not represented by an attorney, the court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the court approves it.

If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. Which means if you signed a reaffirmation agreement on a car then did not continue paying for the car, the finance company would then be allowed to repossess the car. The creditor can also take legal action to recover a judgment against you.

Bankruptcy Law is Federal law.  This sheet provides you with general information about what happens in a bankruptcy case.  The information is not complete.  For more information please feel free to contact us at 1-844-ERASE-BILLS.

This information is provided to all debtors by the US Trustee

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