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What is a Reaffirmation Agreement With the Finance Company

    In a bankruptcy case, a reaffirmation agreement is a legally binding contract between the debtor and a creditor that reaffirms the debtor’s personal liability for a specific debt, such as a car loan.

    If you wish to keep your car after filing for bankruptcy, you may be required to sign a reaffirmation agreement with the lender. The terms of the agreement will depend on the specific circumstances of your case and may include ongoing monthly payments, a requirement to maintain insurance on the vehicle, and other conditions.

    Reaffirming a debt can have a significant impact on your finances, as you will remain personally liable for the debt even after the bankruptcy case is completed. You will also be required to make monthly payments on the debt, which could affect your ability to manage your finances after the bankruptcy.

    If you decide to sign a reaffirmation agreement, you must do so voluntarily and with a full understanding of the terms and conditions of the agreement. Before signing a reaffirmation agreement, you may want to consider speaking with a bankruptcy attorney to ensure that the agreement is in your best interests and to determine your rights and options.

    It’s important to be aware that you can still keep your car without signing a reaffirmation agreement. In some cases, you may be able to redeem the vehicle by paying the lender the fair market value of the vehicle or you may be able to surrender the vehicle and discharge the debt in the bankruptcy case.