What is a reaffirmation agreement?

A reaffirmation agreement is a legal contract between a debtor and a creditor in Chapter 7 Bankruptcy Law in Maryland that can affect a debtor’s financial rights and obligations. Essentially, when a debtor files for bankruptcy, they are attempting to discharge their debts. In a reaffirmation agreement, the debtor agrees to continue to pay the creditor, even though the debt may be discharged by the bankruptcy. Reaffirmation agreements are most often used in Chapter 7 bankruptcies when a debtor wants to keep certain items which are secured by a loan, such as a car or a house. In a reaffirmation agreement, the debtor agrees to honor the original terms of the loan, such as paying the full amount, or paying the same monthly payment. By signing the agreement, the debtor is affirming that they still owe the debt even though they are in bankruptcy. Reaffirmation agreements are binding and the debtor can be held responsible for any terms that are broken. It is important for debtors to understand the ramifications of a reaffirmation agreement before entering into one. This includes understanding the debtor’s financial rights and obligations, such as the ability to keep the property or the ability to modify the terms of the loan. Debtors should also speak to a lawyer to ensure they are fully aware of the implications of a reaffirmation agreement.

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What is a reaffirmation agreement?

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