What Is Reaffirmation?

What is reaffirmation? You may be interested to know that a reaffirmation agreement in bankruptcy may allow you to keep your car or house.

A reaffirmation agreement is an agreement between you and your creditor to keep your loan and your property, despite the fact that you are filing bankruptcy. You do need to continue to make the payments on time, and reaffirmed debts will continue after your bankruptcy is discharged until the loan is paid off.

This can be advantageous when filing a chapter 7 bankruptcy in which you wish to keep your car or home. While a chapter 7 bankruptcy can relieve you of the debt that you have, without a reaffirmation agreement, secured property will be repossessed or foreclosed on.

Reaffirmation is voluntary for the lender though they almost always agree if you are current on your loan payments, because they would rather get their money than not.

You may have other options to keep your property or it may not be a good idea to try and keep it. So much depends on your own unique circumstances and that's why it's so important to consult a good bankruptcy attorney. See my tips for choosing the best attorney.

I hope I've answered the question: What is reaffirmation?!!!

Good luck with your fresh start!