Personalized and affordable help for people under financial stress.

Reaffirmation Agreements

A reaffirmation agreement is a consensual agreement between you and the creditor. Typically, a debtor may sign a reaffirmation agreement on either a car loan or mortgage.  If you reaffirm a debt, it means that the debt is not discharged in the bankruptcy, and you are personally liable on the debt after the bankruptcy case is completed.  If you signed a reaffirmation agreement but no longer want to keep the property, please contact your attorney to see if the agreement can be cancelled.

Typically, if you are current on a car loan, the lender will allow you to reaffirm the debt and keep the vehicle.  Please note that some car lenders will add a small surcharge for processing the reaffirmation agreement.

Please note that since the 2005 Bankruptcy Reform Act, less mortgage companies have been willing to reaffirm the loan.  This does not mean that you will lose your home.  It does mean that your personal liability on the promissory note is discharged by the court, but the mortgage on your property is still valid.  If you intend to stay in the real estate, continue to make the normal mortgage payments.