What is a reaffirmation agreement in Chapter 13 Bankruptcy?

A reaffirmation agreement in Chapter 13 Bankruptcy is an agreement between a creditor and the debtor to continue payments on a debt that would be discharged (wiped away) if the debtor filed for bankruptcy. Reaffirmation agreements are voluntary and not required. In California, a debtor must first sign a Reaffirmation Agreement Information Sheet before signing a Reaffirmation Agreement. With this sheet, the debtor can better understand the implications of such an agreement. When a person files for bankruptcy, they can choose to keep certain secured debt such as a car loan or a mortgage. In this situation, they can sign a reaffirmation agreement to keep the loan and continue making payments on the debt. This is beneficial because it means the borrower can keep the item they purchased and still be relieved of their other unsecured debt. However, with a reaffirmation agreement, the debtor is still personally liable for the debt. So if they fail to make the payments on the loan they agreed to, they can still be taken to court by the creditor and the debt can be reported on their credit report. Therefore, reaffirmation agreements should not be taken lightly and the debtor should carefully consider their decision. Overall, a reaffirmation agreement in Chapter 13 Bankruptcy is an agreement between a creditor and debtor to continue making payments on a debt that would normally be discharged if the debtor filed for bankruptcy. It is a voluntary agreement that the debtor should carefully consider before signing.

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What is a reaffirmation agreement in Chapter 13 Bankruptcy?

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