What is a reaffirmation agreement?

A reaffirmation agreement is an agreement between the debtor and the creditor in a bankruptcy that allows the debtor to keep certain assets despite the bankruptcy proceedings. In the District of Columbia, a debtor may sign a reaffirmation agreement with a creditor to keep assets, such as a home or car, that would otherwise be taken away during a bankruptcy. This agreement ensures that the debtor is still responsible for the entire debt, including any remaining balance. It is important to note that not all debts can be reaffirmed, as certain types of debt, such as student loans, cannot be discharged in bankruptcy. Also, the District of Columbia requires that the debtor receive counseling from an approved credit counselor before signing a reaffirmation agreement. The credit counselor must confirm that the agreement is in the debtor’s best interest. If the debtor defaults on the reaffirmation agreement, the creditor may repossess the asset or foreclose on the home, as if the bankruptcy never occurred. This can be a serious problem for the debtor, so it is important to consider all available options carefully before signing a reaffirmation agreement.

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What is a reaffirmation agreement?

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