What is a reaffirmation agreement?

A reaffirmation agreement is an agreement between you and the creditor holding the loan on your secured debt stating that you are going to keep the item and pay for it outside of the bankruptcy. The creditor will prepare the reaffirmation agreement or have their attorney prepare it and will send it to our office. The creditor may charge a fee if they have their attorney prepare the reaffirmation. Once we receive it we will forward it to you so that you can review and sign the documents. It must be signed by all parties to be valid (you, your attorney, and the creditor). After you sign the documents you will need to return them to our office so that we can file the reaffirmation agreement with the court.

Some things to know about reaffirmation agreements:

• A reaffirmation agreement must be voluntary;
• It must not place too heavy a burden on you or your family;
• It must be in your best interest;
• Not all creditors require a reaffirmation agreement. You can contact them directly to ask before your case is filed. We will contact them once your case has been filed.;
• We need to have a copy of your statement with the account number to request a reaffirmation agreement;
• If you do not reaffirm on a loan and you continue to make the payments most companies will not report the payments to the credit bureau;
• In most cases, you must be current on the loan for us to get a reaffirmation agreement and you cannot use the grace period while we are trying to get the reaffirmation;
• You may not receive billing statements from the mortgage or car company once your case is filed. Also, you may not be able to pay your account online, over the phone, or auto deduct, once the bankruptcy is filed, however, it is still your responsibility to make sure the payment is on time each month;
• Once the loan is paid you will receive the title to your vehicle;
• It can be cancelled 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 reaffirm a debt and then fail to pay it, you owe the debt the same as if there were no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.

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