Debt Re-Affirmation Agreement Sample

In case you have financial problems or you just want to have a new start. You declare bankruptcy and by declaring that, you free yourself from all the debts and loan payments. Because with bankruptcy, the court orders your creditors that you can’t pay your debt and they have to consider it as bad debt and forget about it. But, there are some situations in which even if you declare bankruptcy. You sign an agreement with your creditor that you will keep making his loan payments. This agreement is known as the debt reaffirmation or reaffirmation agreement.

Brief Description of Debt Re-Affirmation Agreement:

As you know there are two types of loans; secured and unsecured. If you include a third person as guarantor, this is also called a secured loan. When you declare bankruptcy because you can’t pay off your debt, this wipes out all the secured and unsecured debts from your record. But with secured debts, the creditors have the legal right to sell your property as collateral or hold the guarantor responsible for your debt. This is why it is really important that even if you declare bankruptcy and can have a clean debt record. You go with reaffirming the debt especially when there is collateral or a guarantor is involved.

Basics of the Debt Re-Affirmation Agreement:

There are couples of things that you need to consider to understand the debt reaffirmation. These are the basic elements of reaffirmation agreement. First, you should understand that if you reaffirm an old debt, you agree to all the previous terms and conditions of that debt and it includes all the clauses that you liked or disliked before. Also when you file for reaffirmation, you agree to put the old debt on your record even if it can be removed completely with declaring bankruptcy. In order to file for reaffirmation, you need to contact the bankruptcy court and get a reaffirmation agreement. After putting particulars in the agreement i.e. details of the debt, payment schedule and updated interest rate, you need to sign it and send it to your creditor.

Uses and needs of Debt Re-Affirmation Agreement:

By reading this debt reaffirmation content, many will wonder that if one can free himself from all the debt by declaring bankruptcy then why he would want to reaffirm an old debt. There are many key reasons of doing so but most importantly, this happens because the debtor wants to keep his property i.e. real estate property or vehicle that is collateral in a secured loan and even by declaring bankruptcy, the creditor has the right to sell the collateral and arrange for the pay back of the debt.

Reaffirmation is also very common when there is a third person involved in the process as the guarantor. If he is one of your friends, family members, relatives or coworkers, you should understand that even if you declare bankruptcy, the guarantor will need to pay off your debt even if you can’t and if you don’t want him to be held responsible for your liability; you only have the choice of reaffirmation even after declaring bankruptcy.

Here is preview of a Free Sample Debt Re-affirmation Agreement as a fill-able PDF form.


Debt Re-Affirmation Agreement

Here is download link for this Debt Re-affirmation Agreement,

Download Debt Re-affirmation Agreement

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