What is a reaffirmation agreement?

A reaffirmation agreement is a contractual agreement between a debtor and a creditor during a bankruptcy agreement. The agreement allows a debtor to agree to pay back a piece of his or her debt rather than have it all discharged. This is a useful tool for dealing with accounts that are in good standing or for debts held by a credit union.

As it is illegal for a creditor to coerce a debtor into paying back a loan, reaffirmation agreements are suggested by the debtor. A bankruptcy attorney must sign an affidavit confirming that he or she has explained the repercussions of the agreement in full to his or her client.

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