How to Reaffirm Debt During Bankruptcy

Although filing for bankruptcy may be necessary, you may wish to still pay back debt, or at least some debts, for a variety of reasons.  Perhaps you wish to keep your vehicle that is subject to a vehicle loan, or retain your home that is subject to a mortgage loan.  Fortunately, you can file for bankruptcy and still pay back debt by executing a reaffirmation agreement.

Reaffirmation of Debt

If you wish to reaffirm a debt, you must enter into a reaffirmation agreement during the course of bankruptcy proceedings.  Although the debt in question is part of the bankruptcy proceedings, you will enter into an agreement by which you will continue to make payments toward the debt in question.  Reaffirmation agreements must meet the scrutiny of the bankruptcy court, in that you must demonstrate that you are voluntarily reaffirming the debt, and that paying the debt would not be a hardship on your family. 

Reaffirm Car Debt

One common reaffirmation of debt agreement involves a particular vehicle that a debtor wishes to retain.  In order to reaffirm car debt, a debtor must execute a reaffirmation agreement by which the debtor is entitled to keep the vehicle, in exchange for making the loan payments secured by the vehicle.  This benefits the debtor in that he or she can retain the vehicle, and benefits the lender in that they receive payments on the loan.

Reaffirm Your Mortgage

Similarly, many debtors wish to maintain their primary residence.  You can reaffirm your mortgage in the context of a bankruptcy proceeding by reaffirmation agreement.  However, if you are already delinquent on your mortgage loan, a Chapter 13 bankruptcy proceeding is the only option available for curing the delinquent payments and maintaining the loan. 

Getting Legal Advice

As reaffirmation agreements may take some negotiation with your creditor and will require approval of the bankruptcy court, you should strongly consider hiring an experienced bankruptcy attorney to assist you with this matter.  If your desire is to file bankruptcy while still maintaining a particular asset that is subject to a loan, you will need legal help in reaching your intended resolution through a reaffirmation agreement.