What is the purpose of a reaffirmation agreement?

What Is the Purpose of a Reaffirmation Agreement? A reaffirmation agreement is a written contract between the debtor filing Chapter 7 bankruptcy and the lender or creditor. When the debtor signs the reaffirmation agreement, they agree to repay the debt on the loan to keep the property, usually a house or car.

What is a reaffirmation notice?

From Wikipedia, the free encyclopedia. A reaffirmation agreement in United States bankruptcy law refers to an agreement made between a creditor and the debtor that waives discharge of a debt that would otherwise be discharged in the pending bankruptcy proceeding.

How can I get out of a reaffirmation agreement?

To cancel a reaffirmation agreement, you must notify the creditor. It is a good idea to notify the creditor in writing via certified mail with a return receipt postcard so you have proof that you have rescinded the agreement.

What are the legal requirements of a reaffirmation agreement?

As part of a reaffirmation agreement, the debtor must sign an affidavit that states: The debtor is choosing to reaffirm the debt; The debtor understands the legal ramifications of reaffirming the debt; and. The reaffirmation will not cause undue hardship to the debtor or any of his or her dependents.

Does a creditor have to accept a reaffirmation agreement?

Reaffirmation agreements are strictly voluntary. A debtor is not required to reaffirm any of his or her debts. There may be other ways to renegotiate payments with creditors without entering into a reaffirmation agreement. A creditor cannot compel you to enter into a reaffirmation agreement.

Can a creditor refuse a reaffirmation agreement?

While a creditor has no duty to execute a reaffirmation agreement and may refuse do to so for any lawful reason or even no reason, the creditor may not violate the debtor’s rights.

What is reaffirmed mean?

: to affirm (something) again especially so as to strengthen or confirm reaffirming the defendant’s innocence reaffirm the validity of a debt a story that reaffirmed her belief in the goodness of humanity.

Why would a debtor choose to reaffirm a debt?

Bankruptcy does not make these security interests in property go away. Under those circumstances, the debtor may choose to reaffirm, even if the debtor does not wish to keep the property securing the debt, so the co-obligor or guarantor does not have to pay.

What happens if a reaffirmation agreement is denied?

Either way – if the reaffirmation agreement is not approved, your personal liability is discharged. And – just like when the court denies approval of the reaffirmation – most lenders will simply keep everything the same, as long as you make timely payments and keep the vehicle insured.

When to use affirm and reaffirm?

If you affirm something, you are saying “I believe in this!” So reaffirming repeats your belief, making it clear that you still feel that way. Politicians reaffirm their beliefs when they repeat a promise people may have forgotten or had cause to doubt.

Can I keep my car without reaffirming?

You can choose to keep the car and continue paying without reaffirming. You take your chances that the lender will repossess the car, but you also keep the benefits of the bankruptcy discharge.

How do I cancel a reaffirmation agreement?

If you are going to cancel a reaffirmation agreement you need to file a notice with the Bankruptcy Court. This notice simply states that your intent has changed and you no longer wish to reaffirm the debt. You also need to notify the creditor of this decision.

Can I rescind a reaffirmation agreement?

Yes, you can rescind, or cancel, a reaffirmation agreement. But the deadline to do so is very quick. Know when it is so you can act timely.

Do I have to sign a reaffirmation agreement?

The short answer is no, you do not have to sign a reaffirmation agreement for any of your debts. It is completely up to you if you want to reaffirm a debt. The main reason for signing a reaffirmation agreement is if you want to keep a secured asset such as a car or home.

Can you change a reaffirmation agreement?

Reaffirmation agreements can be rescinded or undone for 60 days after the date of filing the reaffirmation agreement or until the discharge, whichever occurs later. Be sure to notify your attorney the moment you make the decision that you want to undo the reaffirmation agreement as your attorney must check with the court as to when the reaffirmation agreement was filed, and calculate whether you can rescind it.