What is a Reaffirmation Agreement?

Even though you can discharge your debts with bankruptcy, you might have reasons that you want to repay the debt anyways. For example, you may want to work out a plan with the bank to keep your car. To do so, you must work with the court to sign and file a reaffirmation agreement . These are not required by any laws, but are completely voluntary. They have unique rules that apply to them, such as:

  • must be voluntary, not forced;
  • must not be too burdensome on your family or yourself;
  • must be helpful and beneficial to you; and
  • can be canceled anytime before the court issues your discharge or within 60 days after the agreement is filed with the court, whichever gives you the most time.

If you don’t have an attorney representing you, the court will decide whether or not to approve your reaffirmation agreement. It will not be legally binding unless the court approves it.

Should you reaffirm your debt and then not pay it back, you will remain liable for these debts as if there had been no bankruptcy. The debt will remain active and the creditor can take action to recover any property on which it has a lien or mortgage. Also, the creditor can recover a judgment against you through legal action.

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