Reaffirmation Agreement Process
Unless otherwise indicated, all debts, including vehicle and home loans are personally discharged in a bankruptcy. However, creditors maintain security interests in property. A Reaffirmation is a promise to repay a debt which would otherwise be discharged in your bankruptcy case.
Request a Reaffirmation Agreement - Request a Reaffirmation Agreement from each Creditor for each loan you wish to reaffirm. You may need authorization from your attorney to speak with a creditor first. Creditors may negotiate new rates or terms, so be sure to ask if you can get a better deal. Not all creditors will send reaffirmation agreements, but if they do, they will complete the loan details.
Complete and sign each Reaffirmation Agreement - Sign on all lines marked "Debtor". Use your schedules to complete the paperwork and contact your attorney with any questions to avoid common mistakes. If your monthly income is listed as negative: Provide a reason why you can afford this debt. Follow instructions from the creditor carefully. Return the agreement to the creditor for their signature. Your attorney may want to review the document first, so contact them for details.
Attend any court hearings regarding the Reaffirmation Agreement - You may have to attend a court hearing and explain to the court how you are able to continue making your payments on this debt. Your attorney may also appear, so ask them for details.
After Reaffirmation approved, you are liable on the loan again - Continue making payments on this debt. If you fall behind on a reaffirmed loan, the Creditor can foreclose the home or repossess your car and sue you for any deficiency still owed. You may rescind (cancel) a Reaffirmation Agreement before the bankruptcy court enters your discharge order or within 60 days of filing the Agreement with the court, whatever is later
If you have questions about keeping your property during and after a bankruptcy, it's a great idea to speak with an attorney. Contact our office for a free consultation about how we can help you.