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

A “reaffirmation agreement” is a legal document used in a Chapter 11 bankruptcy case in Texas. It is used when a debtor wishes to keep their personal property or continue to make payments on certain debts instead of having these items discharged in the bankruptcy process. A reaffirmation agreement is a contract between the debtor and the creditor. In it, the debtor agrees to remain liable for the debt and to pay it back even though it is dischargeable in the bankruptcy. The debtor must sign the agreement, and the creditor then must file it with the court. This agreement prevents the debt from being discharged in the bankruptcy. The reaffirmation agreement benefits the creditor because they are guaranteed payment from the debtor. It offers the debtor the chance to keep their personal property or to continue to make payments on certain debts. In some cases, the debtor may even be able to negotiate lower payments or interest rates with the creditor. For a reaffirmation agreement to be legally binding, it must meet certain requirements. It must be in writing, signed by both the debtor and creditor, and it must be approved by the bankruptcy court. Once approved, the reaffirmation agreement is binding even if the debtor files again for bankruptcy in the future.

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

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