reaffirmation agreement

reaffirmation agreement
reaffirmation agreement
An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession (SA-Bankruptcy.com)

A bankruptcy discharge eliminates the debtor's personal liability for dischargeable debts. There are times when an individual debtor may want to reaffirm the debt. This enables the debtor to keep property that may be subject to a lien and on which the payments may be delinquent. The creditor may agree to a delay or a modification of the payment schedule in exchange for the debtor's reaffirming the debt. Reaffirming the debt recreates the personal liability and eliminates that particular debt from the discharge.
Since the 2005 Act, the attorney must now certify that the debtor is able to pay off the debt. In addition, before filing the reaffirmation, the debtor must complete a statement disclosing the debtor's income, the debtor's current monthly expenses, and the resulting balance available to pay the debt that the debtor hopes to reaffirm. If the income is insufficient to pay the reaffirmed debt, the reaffirmation is presumed to present an undue hardship on the debtor, and such presumption lasts for a period of 60 days from the debtor's filing of the reaffirmation. The presumption of undue hardship is rebuttable. (Bernstein's Dictionary of Bankruptcy Terminology)

An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession. (BankruptcyAction.com)

An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession. (California Bankruptcy Dictionary)

An agreement between a debtor and a creditor whereby a debtor revives a pre-bankruptcy debt, for which the debtor was discharged under section 178 of the Act. (Dictionary of Canadian Bankruptcy Terms)

United Glossary of Bankruptcy Terms 2012.

reaffirmation agreement
A bankruptcy discharge eliminates the debtor's personal liability for dischargeable debts. There are times when an individual debtor may want to reaffirm the debt. This enables the debtor to keep property that may be subject to a lien and on which the payments may be delinquent. The creditor may agree to a delay or a modification of the payment schedule in exchange for the debtor's reaffirming the debt. Reaffirming the debt recreates the personal liability and eliminates that particular debt from the discharge. Since the 2005 Act, the attorney must now certify that the debtor is able to pay off the debt. In addition, before filing the reaffirmation, the debtor must complete a statement disclosing the debtor’s income, the debtor’s current monthly expenses, and the resulting balance available to pay the debt that the debtor hopes to reaffirm. If the income is insufficient to pay the reaffirmed debt, the reaffirmation is presumed to present an undue hardship on the debtor, and such presumption lasts for a period of 60 days from the debtor’s filing of the reaffirmation. The presumption of undue hardship is rebuttable.

US Bankruptcy 2012.


Glossary of Bankruptcy.

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