What is creditor reaffirmation?

Creditor reaffirmation is a legal agreement made between a debtor and a creditor in a bankruptcy case. In Maryland, it’s a contract that binds the debtor to a certain set of conditions that protect the creditor from the debtor not repaying the debt in full. The most common example of reaffirmation is a debtor who continues paying off a debt after filing for bankruptcy. The debtor usually has to enter into an “affidavit of reaffirmation”, in which the debtor acknowledges they are aware of the repayment terms of the creditor and state they intend to make the payments even though they filed for bankruptcy. The debtor must sign and submit the affidavit to the court and the creditor to be approved. Upon approval, the debtor must continue making the payments and cannot discharge that particular debt. The purpose of reaffirmation is to give the creditor a sense of security and assurance that they will be repaid, even if the bankruptcy is approved. Reaffirmation is not required in every case, but it may be beneficial to the debtor since it can help them keep a good relationship with the creditor.

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What is creditor reaffirmation?

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