What is a reaffirmation agreement?
June 28, 2022
By Diane Drain Attorney & Retired Law Professor
The secured creditor or landlord may ask the debtor to sign a new contract called a “reaffirmation agreement” or “lease assumption agreement” after the bankruptcy is filed but before the discharge is issued. This new contract has the same terms as the original, and Sections 524(c) and (k) outline the paperwork, disclosures, and procedures that the creditor must follow in order to get this new contract. It must be approved by the Court in order for the debtor to be bound by it.
Because 524(k)(5)(B) requires the debtor’s attorney to certify that the debtor will be able to make the payments, it’s likely that no debtor’s counsel will sign the reaffirmation agreement. This is not only absurd, but it also begs the question of how anyone could certify someone’s ability to pay a future debt.
Below is a link to a video of Bankruptcy Judge Eileen W. Hollowell, filmed explaining the reaffirmation process.
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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