- Free Consultation: (202) 448-5136 Tap Here To Call Us
What Is a Reaffirmation Agreement?
In bankruptcy, a reaffirmation agreement refers to a contract between the debtor and a secured creditor. The reaffirmation (or “reaff”) is an agreement that waives the discharge of a debt that would otherwise be discharged. They allow the debtor to keep collateral that may otherwise be subject to repossession.
Reaffirmation agreements are usually filed on cars and real property. Auto lenders and mortgage companies frequently send debtors in Chapter 7 bankruptcy reaffirmation agreements for execution.
A reaffirmation agreement basically allow you to keep your property (the creditor’s loan collateral) even after the legal discharge of your debt in the bankruptcy. You “reaffirm” your liability on the debt for the property that you wish to keep. Reaffirmation agreements are essentially new contracts between the debtor and the lender. The new contract will allow you to keep the property as long as you continue to pay under the terms of the reaffirmation agreement.
Reaffirmation agreements are strictly voluntary. And in most cases, reaffirmation agreements must be filed within sixty (60) days of the meeting of creditors.
Why sign a reaffirmation agreement?
Debtors like reaffirmation agreements because they get to keep their property. And creditors like reaffirmation agreements because they continue (or begin) to get paid for the loan secured by the property. After all, repossession and foreclosure are time-consuming and expensive processes for creditors.
If you reaffirm a debt and fail to make the payments as agreed, however, the creditor will take action. First, the creditor will take action against the property, either repossession or foreclosure. And second, the creditor will take action against you for any remaining debt once the property has been auctioned off. For this reason, it is absolutely essential that you thoroughly discuss your options with your bankruptcy attorney before deciding to execute a reaffirmation agreement.
They Called. They're Glad They Did.
Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
