Reaffirmation Agreement

A reaffirmation agreement is a formal agreement by a debtor made with a creditor to continue paying a debt that can be discharged in bankruptcy. The agreement eliminates the debtor's rights to a bankruptcy discharge for that particular debt. Because a debtor is giving up his or her legal right to the bankruptcy process, a debtor is not allowed to reaffirm a debt or sign a reaffirmation agreement without the written consent of a legal representative and/or the bankruptcy court judge.

Unless a bankruptcy court has been shown a debtor benefits from a reaffirmation agreement, many bankruptcy courts will not allow them. Many bankruptcy lawyers may also refuse to sign permission for a debtor to submit a reaffirmation agreement to the court.

Reaffirmation agreements are normally sought by secured creditors if the debtor expresses the desire to keep secured property after the bankruptcy has closed. Signing a reaffirmation agreement will guarantee the secured asset will not be repossessed or foreclosed on, but there is also no guarantee a creditor will do either, if the debtor has not defaulted on the loan other than filing for bankruptcy protection.