What is a reaffirmation agreement?

A reaffirmation agreement is a legal document used in California creditors rights law which allows a debtor, who has filed for bankruptcy, to voluntarily continue to pay certain debts, even though the debt may be wiped out by the bankruptcy. This agreement is typically made with secured creditors who will retain lien on a specific property. When this agreement is made, the debtor assumes liability for the debt and agrees to resume payments on the amount owed. The agreement will also list any obligations and terms the debtor is required to fulfill in order to maintain the agreement. By voluntarily entering into a reaffirmation agreement, the debtor safeguards the property and avoids the possibility of losing it if the creditor takes the property away in a foreclosure. It is important to note, however, that before a reaffirmation agreement can become valid, it must be approved by the bankruptcy court. Given the implications of such an agreement, it is important to consult a lawyer or financial professionals to understand the full implications of entering into such an agreement. The decision to sign a reaffirmation agreement should be made after careful consideration and should be based on the debtor’s ability to meet the obligations of the agreement.

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