A reaffirmation agreement is an agreement between a chapter 7 debtor and a creditor that the debtor will pay all or a portion of the money owed, even though the debtor has filed bankruptcy. In return, the creditor promises that, as long as payments are made, the creditor will not repossess or take back its collateral. This means that the debtor will remain personally liable on that debt. See also Bankruptcy Basics – The Chapter 7 Discharge.
Local Rule 4008-1 sets forth requirements for reaffirmation agreements in this court. Usually the filing of a reaffirmation agreement doesn’t require any notice, hearing or order, unless:
a. The debtor is not represented by an attorney in his or her bankruptcy case (but if you have a lawyer and he or she doesn’t sign your reaffirmation agreement the court will set a hearing);
b. The reaffirmation agreement shows that the debtor’s expenses are larger than the debtor’s income and the court decides a hearing is necessary. If the reaffirmation agreement does not include the required explanation why the debtor feels he or she can make the payments the court will usually set the matter for a hearing.
An attorney who files a petition on behalf of a debtor must also represent the debtor during the negotiation and filing of any reaffirmation agreement, whether or not the attorney has charged the debtor a fee that includes representation for the reaffirmation. Further, the attorney must appear at any hearings set on the reaffirmation agreement [refer to Local Rule 4008-1(D), Duties of Debtor's Counsel]. Reaffirmation agreements must contain the original (scanned) signatures of all required parties (the debtor(s), the creditor and, if the debtor is represented by a lawyer, the lawyer). If the reaffirmation agreement is missing any of the required information or signatures, it is possible the court will not approve the reaffirmation agreement or the court will set a hearing.
Reaffirmation Agreements filed in pro se debtor cases (meaning the debtor is not represented by an attorney) will always be scheduled for a hearing to make sure the debtor understands what are the consequences of a reaffirmation agreement, that the agreement is voluntary, and to determine whether the debtor has the ability to maintain payments on the debt being reaffirmed and/or whether the reaffirmation agreement is in the debtor’s best interest.
All judges permit debtors appearing pro se to appear by telephone for hearings on reaffirmation agreements. Please check the assigned judge’s web page for additional information regarding telephonic appearances.
A Reaffirmation Agreement must be filed using Official Bankruptcy Form Reaffirmation Agreememt Cover Sheet and other Reaffirmation Agreement Form(s), when applicable.