An individual debtor can choose to keep certain personal property (such as an automobile) by entering into a Reaffirmation Agreement and having the Reaffirmation Agreement approved by the court. A Reaffirmation Agreement turns a debt that would be discharged into a debt that will not be discharged. This is a decision that should rarely be made and should only be done if the creditor is giving up something in exchange, such as a reduction in loan amount or interest. The Reaffirmation Agreement can be entered into after the bankruptcy case is filed, and there are very detailed and specific requirements which must be complied with.

Court Hearing Not Required – It is not necessary for the bankruptcy judge to approve a Reaffirmation Agreement if a debtor is represented by an attorney during negotiations for the Reaffirmation Agreement and the attorney signs all appropriate sections of the Reaffirmation Agreement.

Court Hearing Required – A bankruptcy judge must review a Reaffirmation Agreement during a court hearing if the debtor is not represented by an attorney during negotiations for the Reaffirmation Agreement. The debtor must attend the court hearing so that the bankruptcy judge can ask questions of the debtor and examine the Reaffirmation Agreement and make sure that it is in the best interest of the debtor to approve the Reaffirmation Agreement. The judge may decide to disapprove the Reaffirmation Agreement even if the debtor has signed it.

See Reaffirmation Agreement Form