Reaffirmation Agreement

Category: legal

A voluntary, legally binding contract where a debtor agrees to remain liable for a debt that would otherwise be discharged in bankruptcy.

Reaffirmation is the "keep my stuff" agreement. It’s most common with car loans. The debt *could* be wiped out, but then the bank would repo the car. The debtor signs an agreement promising to keep paying the loan after bankruptcy specifically so they can keep driving to work.

Common Examples

• The judge questioned the reaffirmation agreement, ensuring the debtor could actually afford the monthly truck payments post-bankruptcy.
• Failing to make payments after signing a reaffirmation agreement allows the lender to repossess the asset and sue for the deficiency balance.