What is a reaffirmation agreement and how does it work in Chapter 7 Bankruptcy?

A reaffirmation agreement is a type of contract under Chapter 7 Bankruptcy Law in South Dakota. It allows a debtor to keep certain specific assets, such as a home or vehicle, even after they have declared bankruptcy. In order to enter into a reaffirmation agreement, the debtor must sign a contract with the lender or creditor they owe. This contract will outline the new terms of the loan, including the repayment amount, repayment timeline, and any additional fees. The terms of the reaffirmation agreement must typically be approved by a bankruptcy court before it can take effect. The goal of a reaffirmation agreement is to help the debtor keep certain assets by allowing them to continue making payments on the loan. After the debtor signs the contract, they are obliged to make all payments in accordance with the terms of the agreement. If the payments are not made, the creditor can pursue legal action against the debtor. In South Dakota, a reaffirmation agreement is only valid if the terms of the agreement are beneficial to the debtor and the debtor is capable of making all payments on time and in full. If the agreement is found to be unfair, the court may refuse to approve it, allowing the debtor to keep the asset without making any further payments.

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What is a reaffirmation agreement and how does it work in Chapter 7 Bankruptcy?

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