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Reaffirmation agreements serve several useful purposes for the bankruptcy-filer. Chief among these is the consumer keeps his/her valuable property a house, a car, tools of the trade, or other essential property. Additionally, reaffirmation puts a bankrupt in better stead with credit-reporting agencies.
Why would someone choose to reaffirm a debt?
Reaffirming a debt informs the lender that you intend to continue to pay the loan. Generally, the lender will continue to report the loan and all payments made on that loan to the credit reporting agencies, which may help improve your credit score after bankruptcy, provided timely payments are made on the loan.
What are the requirements for a reaffirmation agreement?
Reaffirmation agreements require court approval to make sure the debtor can reasonably afford to continue making the payments. If the debtor has an attorney, the attorney must confirm that the agreement is in the debtors best interest and wont cause undue financial hardship.
What happens if you reaffirm a debt then fail to pay it?
If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage.
What is the purpose of a reaffirmation agreement?
A debtor may enter into a reaffirmation agreement in order to take a debt owed on an automobile (for example) and agree to remove that debt from being dischargeable. This is the case for many debtors who want to desire to keep their vehicle even though money is still owed on the car loan.
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What are the benefits of a reaffirmation agreement?
Reaffirmation refers to a clause that requires the employee to confirm or acknowledge that they are not aware of any potential claims or legal issues against the employer at a date after the settlement agreement is first signed.
Related links
Handbook for Chapter 7 Trustees - July 1, 2002
Jul 13, 2011 Only the debtor has standing to seek approval of a reaffirmation agreement. FRBP. 4008. A reaffirmation agreement that fails to comply with
For example, if you are reaffirming an open end credit agreement, the creditor may be permitted by that agreement or applicable law to change the terms of that
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