Reaffirming a debt in Chapter 7 bankruptcy means you are agreeing to remain liable for a specific debt, often for a vehicle loan. If you’re up-to-date on your car payments and want to keep the vehicle, the lender may offer a reaffirmation agreement, which you sign to continue making payments. This keeps the loan in good standing and reflects positively on your credit report. However, the downside is that if something happens and you’re unable to pay, the vehicle could be repossessed, and you may be liable for any remaining balance. Reaffirming a debt can be a good choice if you can afford it and want to retain the property.
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