What is creditor reaffirmation?

Creditor Reaffirmation is a process associated with Bankruptcy Law in Nebraska. It is a voluntary agreement between a debtor and creditor in which the debtor reaffirms a debt that would be discharged in the bankruptcy. Through this process, the debtor agrees to repay the debt after the bankruptcy is finalized, even though it has been discharged. This is beneficial for creditors because it allows them to collect at least some of what is owed to them and gives them additional security in the repayment of the debt. Reaffirmation can be made either orally or in writing, and the agreement must be approved by the court before it can take effect. In most cases, the creditor will require the debtor to complete a reaffirmation agreement after the bankruptcy is filed. The agreement must clearly explain the terms and conditions that the debtor will be bound to, and both parties must sign it. Additionally, creditors are prohibited from making the debtor agree to a reaffirmation agreement in exchange for a lower interest rate or other incentives. Reaffirmation agreements are not uncommon in Nebraska, and oftentimes both parties benefit from this process. The debtor is given an opportunity to keep a piece of property and continue making payments, and the creditor is able to get some money back that may have been lost in the bankruptcy. Nevertheless, the debtor should fully understand the implications of a reaffirmation agreement before signing to avoid any problems down the road.

Related FAQs

What is considered a non-dischargeable debt?
What is creditor reaffirmation?
What is the difference between secured and unsecured creditors?
What is a reaffirmation agreement?
What is the 341 meeting of creditors?
Can I keep certain types of tax debts when filing for bankruptcy?
What is the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy?
How long will a bankruptcy stay on my credit report?
Do I need to list all of my debts when filing for bankruptcy?
What is the difference between a joint bankruptcy filing and an individual filing?

What is creditor reaffirmation?

Related FAQs

Related Blog Posts