What is a reaffirmation agreement in Chapter 13 Bankruptcy?

A reaffirmation agreement in Chapter 13 Bankruptcy is an agreement between a debtor and a creditor that allows the debtor to keep their property or continue to make payments on a debt, even after they filed for bankruptcy. In South Carolina, this type of agreement allows a debtor to still make payments on certain debts, such as a mortgage, vehicle, or other secured debt, after the automatic stay of bankruptcy has gone into effect. In a reaffirmation agreement, both parties must come to an agreement on payment terms before the Court will approve it. A Chapter 13 Bankruptcy Trustee must also provide counseling to the debtor on the agreement’s terms and consequences before the Court will approve it. The debtor must sign the agreement and file it with the Bankruptcy Court. Once the reaffirmation agreement is approved by the Bankruptcy Court, the agreement between the debtor and the creditor is legally enforceable. That means the debtor is still responsible for paying back the debt according to the agreement’s terms. The creditor cannot attempt to collect on the debt outside of the agreement. Reaffirmation agreements can be beneficial for debtors because they can keep their property or continue to make payments on secured debt without having to surrender it to the creditor. Reaffirmation agreements can also help prevent creditors from taking legal action against debtors after filing for bankruptcy, as long as the debtor continues to follow the agreement’s terms.

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What is a reaffirmation agreement in Chapter 13 Bankruptcy?

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