I filed a Fort Lauderdale Chapter 7 Bankruptcy - What is a Reaffirmation Agreement?
On behalf of Bankruptcy Law Firm of Clare Casas on Friday, November 12, 2010.
A reaffirmation agreement is a formal contract made between you and the creditor that states you will pay all or a portion of the money you owe in spite of the Chapter 7 bankruptcy filing. These are commonly entered into for car loans. To simplify it a little, it can be explained as: you had to list your car as a debt in the bankruptcy and the reaffirmation agreement pulls it out of the bankruptcy. As long as you make your scheduled payments under the reaffirmation agreement, you can keep your property after the bankruptcy and the creditor gives their promise that they will not repossess or take back the property as long as your payments are made.
It is important to consult with an attorney before entering into a reaffirmation agreement to ensure that your rights are protected and that it's in your best interest. If you are not represented by an attorney, then you must have a bankruptcy judge approve your reaffirmation agreement. The judge will ask questions to make sure that the reaffirmation agreement does not impose an excessive, unnecessary burden on you or your dependents.