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What Is the Reaffirmation Agreement and How Does It Work?


What is the reaffirmation agreement and how does it work? Attorney Michael Ziegler explains that. A reaffirmation agreement is an agreement that’s filed within the bankruptcy case, and it essentially asks the bankruptcy judge to make an exception for whatever that debt is. Oftentimes, reaffirmation agreements are applied to car loans. In some instances, they are applied to mortgage loans. And in other instances, they are applied to other secure debt, such as financed furniture.

A reaffirmation agreement, essentially discloses the terms of the loan and discloses how much money is in the bankruptcy filer’s budget. It also asks the court to allow the filer to keep the loan in light of what should be the available income. In some instances, a judge may decline a reaffirmation agreement if they feel that the terms are unreasonable, or if the payment is unaffordable to the filer. A bankruptcy filer can elect to voluntarily make payments toward a discharged debt, but the lender can not take steps to collect on the debt. So it would be purely voluntary on the part of the filer.

Sometimes there are strategic or even personal reasons why a bankruptcy filer might voluntarily make payments on discharged debts. For example, if there is a medical service provider that the consumer has a relationship with, they may elect to make the payment on that debt. But again, it’s instrumental that it’s truly voluntary on the part of the filer. Contact attorney, Michael Ziegler in Florida for a free case evaluation today. He founded his law firm on the principles of professional quality and personal care.

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