What is creditor reaffirmation?

Creditor reaffirmation is a process that occurs in bankruptcy law in California where a debtor reaffirms or agrees to continue to pay a debt that otherwise would have been discharged as part of the bankruptcy. Creditor reaffirmation allows the debtor to keep certain assets or debts despite filing for bankruptcy, thus allowing the debtor to still pay their creditors and maintain their credit score. Creditor reaffirmation ensures that creditors are still paid even after the debtor has filed for bankruptcy. Reaffirmation of a debt is an agreement between the debtor and the creditor that usually involves a new payment plan for the remaining debt. The agreement must be approved by the court in order to be legally binding. When a debtor reaffirms their debt, they are legally obligated to make the payments that are outlined in the agreement. Creditor reaffirmation can be beneficial to both the debtor and the creditor. The debtor can keep the assets they otherwise would have had to surrender and the creditor is still able to receive payments. However, it is important for the debtor to ensure that they can make the payments, as defaulting on the reaffirmed debt can have significant repercussions.

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What is creditor reaffirmation?

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