What is a reaffirmation agreement and when is it used?
Full Question:
What is a reaffirmation agreement and when is it used?
01/08/2007 |
Category: Bankruptcy |
State: Alabama |
#239
Answer:
A reaffirmation agreement is an agreement between the debtor and creditor whereby the debtor agrees to repay a debt to the creditor which would otherwise be dischargeable in bankruptcy. Because the debtor is not legally obligated to repay a discharged debt, creditors often insist that a debtor reaffirm a debt secured by collateral, such a vehicle, or the creditor will reposes the collateral. Should the debtor decide to reaffirm a dischargeable debt, the court will often review the record to determine whether the reaffirmation agreement imposes an undue burden on the debtor and whether the agreement is in the debtor's best interest.
