What is a reaffirmed debt in Chapter 13 Bankruptcy?

A reaffirmed debt is a type of debt that is not discharged in Chapter 13 Bankruptcy in South Carolina. It is the process by which an individual debtor agrees to remain liable and repay a debt that would otherwise be discharged in the bankruptcy process. This agreement must be made between the debtor and the creditor and approved by the bankruptcy court. Reaffirmed debts are most often secured debts, such as car loans or mortgages, that the debtor wishes to keep or is required to keep in order to repossess collateral such as a house or car. A reaffirmation agreement is a legally binding contract which outlines the terms of the repayment plan that the debtor must follow, including payment amount and date, in order to remain responsible for the debt. Debtors can choose to reaffirm a debt by signing a reaffirmation agreement before their bankruptcy is completed. If the debt is reaffirmed, the creditor is entitled to collect the payments agreed upon in the agreement, just as if the bankruptcy was never filed. If the debt is not reaffirmed, the debt will be discharged and the creditor will no longer be able to collect payments from the debtor. In South Carolina, the court will review all reaffirmation agreements to ensure that the debtor is not being taken advantage of and that the agreement is in the best interest of the debtor. If the court does not approve the agreement, it will not be enforced.

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