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

A reaffirmation agreement is an agreement between a debtor filing for Chapter 7 bankruptcy and a creditor that allows the debtor to keep a particular piece of secured property and to continue making payments on it. In West Virginia, the debtor must sign the reaffirmation agreement in accordance with the Federal Rules of Bankruptcy Procedure, and it must be filed with the Bankruptcy Court. In order for a reaffirmation agreement to be valid, it must be in the debtor’s best interest. This means that the debtor must have enough income to make payments on the agreement, and that the payments cannot be too large in relation to the debtor’s income. The Bankruptcy Court will review the agreement before it is approved. If the Bankruptcy Court determines that the agreement is not in the debtor’s best interest, it will not be approved. Once a reaffirmation agreement is approved by the Bankruptcy Court, the debtor will be obligated to make the payments under the terms of the agreement. If the debtor fails to make payments, the creditor can take enforcement action, such as repossessing the property or filing a lawsuit. Because of this, a debtor should only enter into a reaffirmation agreement if they are certain that they will be able to make the payments on time.

Related FAQs

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

Related FAQs

Related Blog Posts