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

In West Virginia, a “reaffirmation agreement” in a Chapter 11 bankruptcy is a document that allows a debtor to voluntarily enter into a contract with a creditor to keep paying a debt that would normally be discharged during bankruptcy. This agreement is a way for a debtor to keep their secured property, such as a loan on a car or a mortgage on a home, even after their bankruptcy is completed. A reaffirmation agreement must be filed with the court if the debtor wishes to keep their property. Once it is filed, the court will hear arguments from the debtor and creditor on why this agreement should be included in the bankruptcy. If the court agrees, then the agreement is binding and the debtor is responsible for paying the debt even after the bankruptcy is completed. The purpose of a reaffirmation agreement is to allow a debtor to keep the property that they have a loan on, even if it would normally be discharged during bankruptcy. Without the agreement, the debtor would likely have to surrender the property and leave them without a car or a home. Before signing a reaffirmation agreement, it is important for the debtor to make sure that they can afford to pay the debt. If they cannot, then they should not enter into the agreement as they would be responsible for paying the debt even after the bankruptcy is over.

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

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