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

A reaffirmation agreement is an agreement between a debtor and a creditor that allows the debtor to continue to pay off a discharged debt in Chapter 7 Bankruptcy. This type of agreement is most commonly used when a debtor wants to keep an item that has been deemed non-dischargeable, such as a car or house. In order to be legally binding, the agreement must be in writing and approved by the bankruptcy court. The agreement will typically set forth the debtor’s intention to continue payments on a particular debt, the payment terms, and the amount of the payments. The agreement must also provide that the creditor will not seek any collection activities against the debtor for the debt, such as wage garnishment or other collection attempts. If the agreement is approved by the bankruptcy court, it is legally binding and the debtor must follow the terms of the agreement. It is important to note that if a debtor is unable to make the payments under the agreement, they will still be responsible for the debt as if they had never filed bankruptcy. Because of this, any reaffirmation agreement should be entered into cautiously and carefully. A debtor should be certain that they can meet the agreed upon payment terms before entering into the agreement.

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

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