What is a reaffirmation agreement?

A reaffirmation agreement is an agreement between a debtor and a creditor in a Chapter 7 bankruptcy. The agreement allows the debtor to continue making regular payments on the debt, while the creditor agrees to accept the payments and release the debt from the bankruptcy. This can be beneficial for both the debtor and the creditor, as the creditor can continue to receive payments, and the debtor can avoid having the debt discharged and potentially have the negative credit score impact of a discharged debt. Reaffirmation agreements are not required when filing for Chapter 7 bankruptcy in South Dakota. The agreement must be signed within 45 days of the creditor’s meeting with the debtor and must be approved by the court, which is done by a hearing in which both the debtor and creditor must attend. A lawyer can represent the debtor at the hearing and advise whether entering into a reaffirmation agreement is a good idea or not. Reaffirmation agreements can be extremely beneficial for those who are trying to rebuild their credit, allowing them to keep their credit intact and eventually rebuild their credit score. Reaffirmation agreements also prevent creditors from resorting to collection actions, such as wage garnishment or lawsuits, by allowing them to receive payments on the debt. However, it is important to note that reaffirmation agreements should only be entered into after careful thought, assessment, and consultation with a qualified attorney.

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What is a reaffirmation agreement?

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