Reaffirming a Debt in Chapter 7 Bankruptcy
By Bankruptcy Attorney on Feb 4, 2007 in General Bankruptcy Information
Reaffirming a debt means that you sign and file with the bankruptcy court a legally enforceable document, which states that you promise to repay all or a portion of the debt that may otherwise have been discharged in your bankruptcy case.
Reaffirmation agreements must generally be filed with the court within 60 days after the first meeting of the creditors, which is also known as the 341 Meeting.
Reaffirmation agreements are strictly voluntary; they are not required by the Bankruptcy Code or other state or federal law.
You can voluntarily repay any debt instead of signing a reaffirmation, but there may be valid reasons for wanting to reaffirm a particular debt and a discussion with your bankruptcy lawyer about any possible reasons you may have is a good idea before signing a reaffirmation agreement.
It is important to note that a Reaffirmation Agreement must not impose an undue burden on you or your dependents and must be in your best interest. If you decide to sign a reaffirmation agreement, you may be able to cancel it depending on when you signed and what events have transpired since the signing.
If you reaffirm a debt and fail to make the payments required in the reaffirmation agreement, the creditor can take action against you to recover any property that was given as security for the loan and you may remain personally liable for any remaining debt. This is often why it is better not to reaffirm a debt that will be discharged in your bankruptcy.
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