WHAT DOES IT MEAN TO REAFFIRM A DEBT? WHAT IS A REAFFIRMATION AGREEMENT?
A reaffirmation agreement is simply an agreement that says you promise to pay a debt that was discharged (cancelled) by the bankruptcy. Generally speaking reaffirmation is something you want to avoid. After all, when you declare bankruptcy you eliminate your debts. Why would you want to revive them? There are situations where you will want to consider signing a reaffirmation agreement. Let’s say you owe Sears $450.00 on a credit card. Sears may offer you a deal like this: Even though you are cancelling the debt to Sears by filling bankruptcy if you promise to pay Sears anyway they will let you keep the credit card account open. They might agree to lower your interest rate. Another situation where you might wish to sign a reaffirmation agreement is where the creditor is threatening to repossess your personal property if you refuse to sign the reaffirmation agreement. Let me explain: Let’s say you purchase something, for example a car, and you finance the purchase with a secured loan. Of
