What is a reaffirmation agreement?

A reaffirmation agreement is a legal document that a debtor and creditor can sign if the debtor wishes to keep an item that they would otherwise have to return or surrender because of a bankruptcy petition. This agreement serves as a way for the debtor to keep the property they owe money on. When filing bankruptcy, many items are typically subject to surrender such as cars, homes, or other personal property. A reaffirmation agreement is an agreement between a debtor and a creditor that allows the debtor to keep the item. In exchange, the debtor agrees to keep making payments on the loan until the loan is paid off in full. Reaffirmation agreements must be voluntary, which means the debtor must not feel pressured into signing the agreement. In Colorado, reaffirmation agreements must be approved by a judge and must be in writing in order to be enforceable. This means if the debtor defaults on the loan after signing the agreement, the creditor can take legal action against the debtor and try to collect the debt owed. It is important for any debtor considering a reaffirmation agreement to consult with a bankruptcy attorney prior and make sure they understand the risks associated with the agreement.

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What is a reaffirmation agreement?

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