What is a reaffirmation hearing?

A reaffirmation hearing is a legal term in California creditors rights law that refers to a court hearing in which a debtor (the person who owes money) agrees to take on the responsibility of paying back a debt in exchange for the creditor (the person being owed money) forgoing the right to repossess the debtor’s property. This type of hearing is commonly used when a debtor wants to keep possession of a property or item, such as a car or home, even though they owe money for it. When a debtor agrees to reaffirm their debt, they must sign a new agreement that creates a new payment arrangement, outlining the amount and terms of payment. Because reaffirmation involves taking on more debt, the court holds a hearing to make sure that the debtor’s decision is not be based on any kind of coercion or other invalid basis. In a reaffirmation hearing, the debtor must present evidence of why taking on additional debt is in their best interest. This can include evidence that they have income that will support the new payments or that repossessing the item is not a practical alternative. The court must also review the terms of the new agreement to make sure that the debtor is not being taken advantage of. If the court finds that the agreement is fair and that the debtor understands the risks involved in taking on more debt, the court will often approve the reaffirmation agreement.

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