A reaffirmation agreement is a voluntary, legally binding contract you sign during a Chapter 7 bankruptcy that lets you keep a specific debt—and the property tied to it—instead of having that debt wiped out by your discharge. By signing, you agree to remain personally responsible for paying the debt even after bankruptcy ends, which means the lender can later sue you or repossess the collateral if you fall behind. It is one of the highest-stakes decisions in a bankruptcy case, and it is almost always worth having a lawyer review before you commit.
Reaffirmation agreements are governed by the federal U.S. Bankruptcy Code, specifically Section 524(c) and (d) (11 U.S.C. § 524). Because bankruptcy is federal law, the basic rules are the same in every state, though local court practices and the property you are protecting can vary. This is general information to help you understand the choice—not legal advice for your specific case.
What "reaffirming" a debt actually means
When you file Chapter 7, the goal is usually a discharge—a court order that erases your personal legal obligation to pay most debts. After discharge, creditors generally cannot collect those debts from you ever again. A reaffirmation agreement carves out an exception: it pulls one debt back out of the discharge so that debt survives bankruptcy intact, exactly as if you had never filed on it.
People most often reaffirm secured debts—loans tied to specific property, like a car loan or, less commonly, a home mortgage. The classic example is a car: you still owe money on a vehicle you want to keep driving, and the lender wants assurance you will keep paying. Reaffirming the car loan keeps the contract alive so you keep the car and keep making payments under the original terms.
The trade-off is real. After you reaffirm, you are personally on the hook again. If you later default, the lender can repossess the collateral and sue you for any remaining balance (a "deficiency")—protection that your bankruptcy discharge would otherwise have given you. Without reaffirmation, the worst case is usually losing the collateral, not owing money on top of it.
Why reaffirmation agreements are mostly a Chapter 7 issue
Reaffirmation is primarily a feature of Chapter 7 (liquidation) bankruptcy. In Chapter 13 (the repayment-plan bankruptcy), secured debts are typically handled through the multi-year plan itself, so formal reaffirmation agreements are rarely used. If you are in Chapter 7 and want to keep financed property, reaffirmation is one of the options the court will expect you to address.
When you file Chapter 7, you must file a Statement of Intention telling the court what you plan to do with each secured debt. For each item you generally choose to: (1) reaffirm the debt and keep the property, (2) redeem the property by paying the lender its current value in a lump sum, or (3) surrender the property and walk away with the debt discharged. There is a federal deadline to file this statement—tied to your case timeline—and acting on it. Because the exact timing depends on your filing date and court, confirm the dates with the bankruptcy clerk or your attorney rather than guessing.
How a reaffirmation agreement gets approved
You cannot simply sign a piece of paper and be done. The Bankruptcy Code builds in several safeguards because Congress recognized that reaffirming a debt can undo much of the relief bankruptcy is supposed to provide.
- It must be voluntary. No creditor can force you to reaffirm. You can almost always keep current property in other ways, or choose to surrender it.
- It must be filed with the court. The signed agreement, on an official court form, has to be filed before your discharge is entered. A reaffirmation signed after discharge is generally not valid.
- It requires disclosures. The agreement must spell out the amount reaffirmed, the interest rate, and a clear warning that you do not have to sign and that the debt will not be discharged if you do. These disclosures echo the consumer-protection spirit of the Truth in Lending Act (TILA), though the reaffirmation form itself is a creature of the Bankruptcy Code.
- An attorney certification or a judge's approval is needed. If you have a lawyer, that lawyer must certify that you can afford the payments and that reaffirming does not impose an "undue hardship." If you do not have a lawyer, the bankruptcy judge must hold a hearing and personally approve the agreement—and the judge can refuse to approve it if it looks like a bad deal for you.
One important exception: courts generally do not require a hardship review or hearing for reaffirmations involving real property (your home mortgage), because that category is treated differently under the statute.
You have the right to cancel
Even after you sign and file a reaffirmation agreement, federal law gives you a right to rescind (cancel) it. Under Section 524(c)(4), you can back out any time before your discharge is entered, or within 60 days after the agreement is filed with the court—whichever is later. To cancel, you give written notice to the creditor that you are rescinding the agreement. This 60-day window is one of the few specific federal deadlines in the reaffirmation process, and it gives you a real chance to change your mind after the pressure of the bankruptcy hearing has passed.