What Is Reaffirmation?
Reaffirmation is a type of agreement a debtor makes with a lender to repay some or all of a debt despite going through bankruptcy proceedings. When a person files for bankruptcy, they do so in order to be relieved of a debt burden they cannot pay.
By entering into a reaffirmation agreement, a borrower often maintains possession of an asset held as collateral, such as a home or a car, so long as they can fully repay the debt owed on that particular loan.
Key Takeaways
- Reaffirmation is an agreement by a debtor, to a lender, to repay some or all of their debt.
- Debtors make reaffirmation agreements purely voluntarily.
- When a borrower reaffirms a debt, this is noted by credit reporting agencies, which…