What is a reaffirmation agreement?

A reaffirmation agreement is a type of voluntary agreement under Chapter 7 bankruptcy law in California. Reaffirmation agreements are used when a debtor wants to keep certain property that they would otherwise need to give up in the bankruptcy process. When a debtor agrees to reaffirm a debt, they agree to pay back the creditor in full, despite having discharged the debt through the bankruptcy proceedings. In order to enter into a reaffirmation agreement, the creditor must agree to the terms. This means that the creditor must offer a plan that the debtor can pay back over time. The creditor may also choose to reduce the amount of debt that the debtor has to pay back. This can be a beneficial process for both the creditor and the debtor. If a debtor wishes to reaffirm a debt, they must first file a motion with the bankruptcy court and submit the terms of the agreement to the court. The court will then decide if the agreement is reasonable and if it passes all of the bankruptcy laws. After the court approves the agreement, the debtor must fulfill the requirements of the agreement in order to maintain their debt-free status. Once a reaffirmation agreement has been completed, the debtor is again responsible for the debt. This means that the creditor can continue to collect payments on the debt that was discharged, even after the bankruptcy has been finalized. It is important to remember that a reaffirmation agreement is a legal agreement and must be followed carefully. Failure to do so may result in additional charges and legal fees.

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