What is a reaffirmation agreement in Chapter 13 Bankruptcy?

A reaffirmation agreement in Chapter 13 Bankruptcy is a voluntary contractual agreement between the debtor and a creditor that helps the debtor continue to pay a debt after filing bankruptcy. This agreement is common with secured creditors such as those who own the collateral in car loans or mortgages. The agreement allows the debtor to keep their property by continuing to pay off the debt. The agreement is important because it prevents the creditor from immediately taking the property, such as repossessing a car. In Pennsylvania, courts must approve any such agreement as part of the bankruptcy case. The agreement has to be in writing and must be signed by both the debtor and the creditor. The debtor also has to provide proof to the court that the agreement is in their best interest and that it does not contain any unfair terms. For the agreement to be valid, the debtor must be able to make the payments as agreed and must make all of the payments. If the debtor does not fulfill their obligations, then the debt is no longer discharged and the creditor is again able to pursue the debtor for the debt. Reaffirmation agreements can be beneficial if the other debt options are not feasible, but it is important to carefully consider the terms of any agreement before agreeing to it, especially when it involves large amounts of debt.

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What is a reaffirmation agreement in Chapter 13 Bankruptcy?

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