Reaffirmation Agreements- What is it? Do I need to sign one?

By Gregory Nassar

Reaffirmation Agreements- What is it? Do I need to sign one?

Often, secured creditors send a "reaffirmation agreement" to the debtor or debtor's counsel. A reaffirmation agreement is a new contract signed between the debtor and the creditor/lender that reaffirms the debtor's original contractual obligation with that specific creditor/lender over the secured item (i.e. a vehicle or motorcycle).

Basics:

· The debtor does NOT have to sign a reaffirmation agreement.

· Reaffirmation agreements can be revoked by the debtor within 60 days after signing.

· They must be signed by the debtor and the lender/creditor and filed with the court prior to discharge.

· The Court must approve each reaffirmation agreement.

· Some lenders require the debtor to sign a reaffirmation in order to keep the property (i.e. a car or motorcycle) after the bankruptcy so long as you remain current.

Bankruptcy planning, especially determining which chapter for relief to file, is difficult enough. Adding the decision whether to sign a reaffirmation agreement or not during the petition process creates additional complexities that must be properly evaluated by a knowledgeable bankruptcy attorney. As a highly skilled bankruptcy attorney, I make it my goal to provide each client dedicated the time and experience to assist clients with their bankruptcy filing.

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