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What is a reaffirmation?

What is a reaffirmation agreement? A reaffirmation (agree to pay back), in bankruptcy terms, is an agreement between the debtor and creditor that waives the discharge of the debt that would have otherwise been discharged. 11 USC Section 524 is the bankruptcy code section where reaffirmation is found. Reaffirmations are voluntary. Many debtors choose to reaffirm their car loans. The creditor and debtor must both sign the Reaffirmation Agreement, which is actually a standard form known as Form 240A.


If you later fail to pay a reaffirmed debt, you will still owe it as if you never filed bankruptcy. The creditor can collect on the debt through any legal means. For this reason, reaffirmation agreements should be taken seriously. If you fail to pay later, then you will be liable for the debt and one of the reasons for your filing bankruptcy (fresh start from all possible debt) would have failed. You do have the right to rescind or cancel the reaffirmation agreement any time before the discharge is entered or within 60 days of filing the agreement, whichever is later.


Contact a Houston bankruptcy attorney at the Rashid Law Firm to learn more about reaffirming a debt.