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

A reaffirmation agreement is a type of legal agreement that is available to those who are filing for Chapter 11 bankruptcy. It allows the debtor to continue paying a particular debt even after filing for bankruptcy, such as a mortgage, auto loan, or other secured loan. This type of agreement is voluntary, and the debtor must enter it knowingly and willingly, as it will not be accepted if it is found to be entered into under duress or coercion. When agreeing to a reaffirmation agreement, the debtor agrees to remain liable for all amounts owed to the creditor, including both principal and interest. The agreement must also be approved by the bankruptcy court before it can take effect. If a bankruptcy discharge is granted, the agreement is no longer enforceable and the debtor is no longer liable for repayment. In California, the reaffirmation agreement must be in writing and signed by the debtor with the date of execution noted. It must also include a statement that the debtor knows that he or she is voluntarily agreeing to remain liable for any amounts owed to the creditor after the bankruptcy case is closed. Furthermore, the debtor must receive a copy of the fully executed agreement in order for it to be valid.

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

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