What is creditor reaffirmation?

Creditor reaffirmation is a type of bankruptcy agreement in which a debtor agrees to continue making payments on a debt even after filing for bankruptcy. This agreement is usually used when a debtor wants to keep an item they had previously purchased such as a home or car. In Washington, creditor reaffirmation must be voluntary and the debtor must be able to show that they can afford the payments based on their income and budget. When a creditor reaffirmation is agreed upon, the debtor makes payments directly to the creditor and the payments are treated as if the bankruptcy case had not been filed. This means that if the creditor reports to the credit bureaus, the payments can still be seen on a credit report and help to improve the debtor’s credit score. Creditor reaffirmation can provide financial relief for debtors, allowing them to keep items that they would otherwise lose in bankruptcy. However, it is important to weigh the pros and cons of creditor reaffirmation to make sure it is the best option. If payments cannot be made, the debt could potentially be worse off than when the bankruptcy was filed. A debtor must be sure they are capable of making the payments before signing a reaffirmation agreement in Washington.

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What is creditor reaffirmation?

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