What is a “reaffirmation agreement” in a Chapter 11 bankruptcy?

A “reaffirmation agreement” in a Chapter 11 bankruptcy is a way for a debtor to keep a secured debt, even after filing for bankruptcy. When a debtor files for Chapter 11 bankruptcy, some of their debt may be considered secured debt. Secured debt is debt that has collateral, like a car loan or a mortgage. To keep a secured debt, the debtor must sign a “reaffirmation agreement” with their creditor. In a “reaffirmation agreement,” the debtor agrees to be held responsible for the debt, even after the bankruptcy is over. This means that the debtor will continue to pay the loan according to the terms of the agreement. It also means that the creditor can take back the collateral if the debtor doesn’t make their payments. The “reaffirmation agreement” is an important part of the Chapter 11 bankruptcy process, as it allows the debtor to keep certain secured debts, and it prevents the creditor from taking back the collateral. In California, “reaffirmation agreements” must be approved by the court before they are valid. The court must be satisfied that the debtor is able to make all payments according to the agreement.

Related FAQs

Does filing for Chapter 11 bankruptcy protect me from criminal prosecution?
How does a Chapter 11 bankruptcy affect my business?
How do I get back on my feet financially after filing for Chapter 11 bankruptcy?
What is a “claims resolution” process in a Chapter 11 bankruptcy?
What is a “reaffirmation agreement” in a Chapter 11 bankruptcy?
What happens to my creditors in a Chapter 11 bankruptcy?
How do I find financing for a Chapter 11 bankruptcy?
What debts are eligible to be discharged in Chapter 11?
What is “adequate protection” in a Chapter 11 bankruptcy?
How is a liquidating plan approved in a Chapter 11 bankruptcy?

What is a “reaffirmation agreement” in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts