What is a reaffirmation agreement?

A reaffirmation agreement is a legal document between an individual and a creditor in which the individual agrees to remain liable for a debt that would otherwise have been discharged in a bankruptcy. In Delaware, a reaffirmation agreement must be voluntary on the part of the debtor, and the debtor must fully understand the terms of the agreement. A reaffirmation agreement typically involves a reorganization of the debt, such as reduced interest rates or an adjusted payment plan. It can also involve an extension of the term of the debt, or a commitment to pay the entire amount owed. The debtor must have adequate income to pay the debt according to the terms of the agreement. Reaffirmation agreements can be beneficial for debtors because they can help them maintain their credit rating and avoid defaulting on their debts. It also allows the creditor to be paid in full and may help them avoid losses in collecting the debt. However, if a debtor does not have the ability to pay the debt according to the terms of the agreement, then they should not sign a reaffirmation agreement.

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What is a reaffirmation agreement?

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