What is a reaffirmation agreement?

If you have an auto loan, the lender will often have a security interest in the automobile.  The security interest protects the creditor if you cannot repay on the loan, giving them the right to repossess.  Bankruptcy does not make these security interests go away.  In a bankruptcy filing, if you wish to keep the car, you may enter into a reaffirmation agreement. The agreement obligates you to continue making payments despite the bankruptcy filing. These agreements are strictly voluntary. Before choosing to reaffirm, the loan should be discussed with an attorney to determine if it is in your best interests to enter into the agreement.

Category: Chapter 7

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