What is a Debt Reaffirmation Agreement?
After you file for bankruptcy protection, you might decide you want to pay back a specific debt, or you might be asked by one of your creditors to repay a debt. If you pay a debt that would have otherwise been discharged in bankruptcy, you are required to sign a debt reaffirmation agreement and file it with the court. This legal and enforceable agreement contains your promise to pay all or part of the specified debt.
An example of a situation in which an individual might choose to file a debt reaffirmation agreement is when they need a vehicle to get to work and would rather repay the vehicle loan than have the car repossessed.
Completing or canceling the agreement
Creating a reaffirmation agreement is a completely voluntary process. If you choose to enter into such an agreement, it must not place any undue burden on you or your family, and you should be completely sure it is in your best interests to do so. Just because a creditor asks you to sign one does not mean you have to — or that it would make sense for you to do so.
These agreements may also be canceled in certain circumstances. You may seek a cancelation either before the court issues a discharge or any time within 60 days from the date you filed the reaffirmation agreement with the bankruptcy court. A discharge is a type of order from the bankruptcy court stating your debts have been forgiven, although it will not include debts like child support, some types of taxes and most student loans.
If you believe a debt reaffirmation agreement is in your best interests, our attorneys will help you through the process to make sure you do it in a financially viable way. For the assistance you need, contact the Chicago bankruptcy lawyers at DebtStoppers by calling 800-440-7235 or contacting us online.