What Does Reaffirmation Agreement Mean

By entering into a confirming agreement, a borrower often retains ownership of an asset held as collateral, such as a house or car, as long as they can fully repay the debt for that particular loan. Recondation is a type of agreement that a debtor enters into with a lender to repay some or all of the debt, even if it has been the subject of insolvency proceedings. When a person files for bankruptcy, they do so in order to be relieved of a debt burden that they cannot pay. If you have a home, you may want to keep it after you`ve declared bankruptcy, especially since it`s harder to get some type of loan once you`ve gone bankrupt. If the court allows the agreement, it will be as if you have never declared bankruptcy in respect of this debt and you still owe the full amount. Any agreement to be confirmed must be concluded before the start of the discharge. If you are in the process of confirming a debt and believe that it will not be filed before the release period expires, notify the Clerk`s office in writing to delay the presentation of the discharge until the new declaration is submitted. The statements are strictly voluntary. If you wish to confirm (accept repayment) of a particular debt, you must enter into a written agreement with the creditor that legally obliges you to pay an excusable debt (extinguished by bankruptcy) in whole or in part. The form for this is Form 240A Reaffirmation Agreement. Both the creditor and the debtor must complete the form in its entirety, which indicates the nature of the debt, the value of the security right and the reason for the new declaration. Both parties to the affirmation must sign on the appropriate signature lines.

Since you will not be represented by a lawyer, confirmation will be automatically set for the hearing and you will receive written notification of the date and time of the hearing. You must appear at the hearing where the judge will determine, based on your situation and the nature of the reconfirmation, whether it is in your best interest to confirm it. For example, the court cannot allow you to confirm a $3,000 debt for a vehicle that could be worth $1,000. Parts A to E – including the debtor`s disclosures, the lawyer`s confirmation agreement, the debtor`s statement in support of the reconfirmation and the application for judicial approval of the document required to confirm a debt. The instructions appear in the Confirmation Agreement form. Debtors enter into purely voluntary stand-by arrangements. These are legal documents, but a person cannot go to jail for raping them. If the debtor does not make the payments provided for and violates the agreement, the lender takes possession of the security if he wishes. Chapter 7 releases the borrower from the debt he must pay, but does not eliminate the fact that the lender can claim the pledged assets as collateral.

Your personal responsibility for the debt is gone, but not the lender`s right to take your assets. Reaffirmation protects against a lender taking your assets. It is not necessary for the Court of Justice to approve a standby arrangement applicable to consumer debts secured by immovable property. .