What is a reaffirmation agreement?

A reaffirmation agreement is a document signed between a debtor and creditor in Louisiana that allows the debtor to continue paying for debt that would otherwise be discharged in a bankruptcy. Reaffirmation agreements are most often used for secured debt, such as mortgages and vehicle loans. These agreements create a new contract between the debtor and the creditor that stipulates how the debt will be repaid and how the creditor will remain in possession of the collateral. In Louisiana, the reaffirmation agreement must meet certain conditions in order to be legally binding. The agreement must be in writing and signed by the debtor and creditor and must also be approved by the court before it takes effect. The debtor also must receive counseling from an approved credit counseling service. Reaffirmation agreements are important for debtors who wish to retain certain assets such as a house or car. By entering into a reaffirmation agreement, the debtor is agreeing to remain responsible for the debt attached to those assets, even if it would have been discharged in bankruptcy. This is important for creditors, as they have a guarantee that they will be paid back.

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What is a reaffirmation agreement?

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