What is a reaffirmed debt in Chapter 13 Bankruptcy?

Reaffirmed debt in Chapter 13 Bankruptcy is an agreement between the debtor and a creditor to continue payments on a specific debt after the debtor has filed for bankruptcy protection. In California, a debtor who is filing for Chapter 13 bankruptcy can enter into an agreement with a creditor, or with multiple creditors at once, to reaffirm a debt. This means that, instead of having the debt discharged as part of the bankruptcy, the debtor agrees to continue payments on the loan. Reaffirming a debt is not compulsory; a debtor may choose to reaffirm specific debts or none at all. If a debtor chooses to reaffirm a debt, they must sign a reaffirmation agreement, which is a new contract between the debtor and the creditor. This agreement states that the debtor agrees to remain liable for the debt and continue making payments on the loan, as well as any other previously agreed upon terms. The reaffirmation agreement must be submitted to the court for approval before it can be finalized. Reaffirming a debt has both pros and cons for debtors in California who are filing for Chapter 13 bankruptcy protection. On one hand, reaffirming a debt can be beneficial as it helps the debtor maintain their credit score and allows them to keep the property that is associated with the loan. On the other hand, if the debtor is unable to make their payments in the future, they may be responsible for the entire amount of the loan. Therefore, it is important for debtors to weigh their options carefully before deciding to reaffirm a debt.

What is a reaffirmed debt in Chapter 13 Bankruptcy?

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