Virginia Bankruptcy Lawyer - Bankruptcy Attorney

What is a reaffirmation agreement?

A reaffirmation agreement is an agreement by which a debtor becomes legally obligated to pay all or a portion of an otherwise dischargeable debt. In order to be effective and enforceable, the agreement must be filed in your bankruptcy case. If the reaffirming debtor is not represented by an attorney, the Court will hold a hearing on the agreement. In some instances, the Court will hold a hearing even where the debtor is represented by counsel. The debtor must appear in person at the hearing. The judge will ask questions to determine whether the reaffirmation agreement imposes an undue burden on you or your dependents and whether it is in your best interest. Since reaffirmed debts are not discharged, the Bankruptcy Court will normally permit you to reaffirm only secured debts where the collateral is important to your daily activities.

Reaffirmation agreements are strictly voluntary. They are not required by the Bankruptcy Code or other state or federal law. And you need not reaffirm a debt in order to repay it; the law does not prohibit you from repaying a discharged debt voluntarily--it only prohibits a creditor from collecting the debt. But there may be valid reasons for wanting to reaffirm a particular debt. Since a reaffirmation agreement takes away some of the effectiveness of your discharge, you may want to consult legal counsel before agreeing to a reaffirmation. Even if you sign a reaffirmation agreement, you have a minimum of sixty (60) days after you file the agreement to change your mind and rescind the agreement. If your discharge date is more than sixty (60) days after you file the agreement, you have until your discharge date to rescind the agreement. If you reaffirm a debt and fail to make the payments as agreed, the creditor can take action against you to recover any property that secures the debt, and you will be personally liable for any remaining debt to that creditor.

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