Table of Contents
- Reaffirmation Agreements: Keeping Debt After Bankruptcy
- What Is a Reaffirmation Agreement?
- Key Points:
- Why Would You Reaffirm a Debt?
- Other Possible Benefits:
- Risks of Reaffirming Debt
- Do You Need to Reaffirm Every Secured Debt?
- Reaffirmation Agreement Requirements
- Can You Cancel a Reaffirmation Agreement?
- How a Bankruptcy Attorney Near You Can Help
- ReferU.AI Finds the Right Legal Help
- Final Thought: Don’t Reaffirm Without a Strategy
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Navigating bankruptcy can be complex, especially when considering reaffirmation agreements, which allow you to keep certain debts and assets post-filing. Understanding the risks and benefits of these contracts is crucial, and consulting with an experienced bankruptcy attorney near you can help you make informed decisions for your financial future.
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Discover the ins and outs of reaffirmation agreements and how they allow you to keep certain debts after bankruptcy, such as vehicle loans. Learn about the risks involved and how a bankruptcy attorney near you can guide you through the process to make informed financial decisions.
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Flat vector illustration of a person reviewing a reaffirmation agreement with a bankruptcy attorney near them, featuring pros and cons checkboxes, and icons for secured assets like a car and furniture, symbolizing the decision to keep debt after bankruptcy.
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Mar 30, 2025 06:22 PM
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Reaffirmation Agreements: Keeping Debt After Bankruptcy
Bankruptcy is often about walking away from unmanageable debt—but what if you want to keep certain debts after filing? That’s where reaffirmation agreements come in. These legal contracts allow you to continue paying a debt—usually to keep an asset like a car—even though you’re filing for Chapter 7 bankruptcy.
But is reaffirmation a smart move or a trap? In this post, we’ll explain how reaffirmation agreements work, the risks involved, and how a bankruptcy attorney near you can help you make the right call.
💡 For every post in this series, scroll down to “Related Posts.”
What Is a Reaffirmation Agreement?
A reaffirmation agreement is a voluntary contract between you and a creditor stating that you agree to remain liable for a particular debt—even after bankruptcy. In return, you get to keep the asset that secures the loan (like your car or furniture).
Key Points:
- It only applies to Chapter 7 bankruptcy (not Chapter 13).
- You must be current on payments.
- The court may need to approve the agreement—especially if you’re not represented by an attorney.
Why Would You Reaffirm a Debt?
The most common reason to reaffirm a debt is to keep a vehicle or another essential asset. Many lenders will require reaffirmation before allowing you to continue payments and retain possession of the item.
Other Possible Benefits:
- Helps rebuild credit faster (as on-time payments post-bankruptcy are reported to credit bureaus)
- Avoids repossession if you’re otherwise in good standing
Risks of Reaffirming Debt
Reaffirmation comes with serious downsides. If you fall behind after bankruptcy:
- The creditor can still repossess the asset.
- You remain personally liable for the debt.
- You could face lawsuits, garnishments, or credit damage—even though you filed bankruptcy.
That’s why reaffirming should be done only if the asset is truly necessary and the loan is manageable.
Do You Need to Reaffirm Every Secured Debt?
No. In many cases, you can:
- Surrender the asset and walk away from the loan
- Continue making payments without reaffirming (though some creditors won’t allow this and may repossess even if you pay)
A bankruptcy lawyer near you can negotiate with lenders and advise on whether reaffirmation is required—or if you can keep the property without it.
Reaffirmation Agreement Requirements
- Must be signed and filed before discharge is entered
- Must include detailed disclosures about the debt terms
- Must be approved by the court (especially if the agreement creates a hardship)
Can You Cancel a Reaffirmation Agreement?
Yes—you have a 60-day window from the date it’s filed (or before discharge is entered, whichever is later) to rescind the agreement. This gives you a chance to change your mind without penalty.
How a Bankruptcy Attorney Near You Can Help
Reaffirmation can seem simple—but it’s a legally binding contract. A bankruptcy attorney near you will:
- Review your budget and loan terms
- Negotiate better terms if possible
- Advise if reaffirmation is truly in your best interest
- Represent you at the court hearing, if required
ReferU.AI Finds the Right Legal Help
ReferU.AI connects you with a bankruptcy attorney near you who understands the pros, cons, and alternatives to reaffirmation agreements. Our AI-powered platform helps you find legal help that protects both your assets and your long-term financial future.
Final Thought: Don’t Reaffirm Without a Strategy
Sometimes keeping a loan makes sense. But sometimes it’s better to walk away. Reaffirmation is a serious decision—and one best made with experienced legal guidance.
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