Reaffirmation Agreements

In bankruptcy proceedings, a debtor is entitled to receive a discharge, or forgiveness, of certain debts. Once the court grants discharge of a debt, a creditor may not seek payment or collect the debt. However, in certain circumstances, a debtor may wish to keep the asset that is the subject to discharge, such as a home or vehicle. In that situation, the debtor must enter into a written reaffirmation contract with the creditor and maintain payments on the asset.

A debtor is not required to reaffirm a debt that can be discharged in bankruptcy. However, a debtor will voluntarily do so if he needs the asset and is able to maintain payments. Additionally, a debtor may want to repay a debt if it is owed to a family member or to a creditor with whom he wishes to maintain a good relationship. Sometimes the debtor is able to voluntarily pay for an asset without signing a reaffirmation agreement.