What is creditor reaffirmation?

Creditor reaffirmation is a process under Florida bankruptcy law that allows a debtor to reaffirm a loan or debt that would otherwise be discharged in bankruptcy. This means that the debtor agrees to remain liable for repayment of the debt, even though it would normally be discharged in bankruptcy. The creditor must agree to the reaffirmation, and the debtor must sign a reaffirmation agreement. Creditor reaffirmation is typically useful for loans secured by collateral, like a car loan or home loan. If the loan is not reaffirmed, the creditor can repossess the collateral—the car or house. In such cases, agreeing to reaffirmation allows the debtor to keep the collateral and make payments on the loan. When the debtor reaffirms a loan, the debt is no longer treated as a dischargeable debt in the bankruptcy case, and the debtor is liable under the terms of the loan. The debtor must make the payments that are outlined in the reaffirmation agreement, and failure to do so may result in the creditor taking action against the debtor. Reaffirming a debt does have some risk, as the debtor may still face repossession of the collateral if payments are missed. Hence, it is important to consider the costs and benefits before deciding whether or not to reaffirm a loan.

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What is creditor reaffirmation?

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