What Happens If You Do Not Reaffirm the Debt in Bankruptcy?


If debt continues to overwhelm you, and you have decided that bankruptcy is your only option, consider the option of reaffirming the debt for certain possessions. According to the federal bankruptcy court, consumers generally reaffirm on secured obligations relating to a home or vehicle. If you choose to reaffirm a debt, you must file a reaffirmation agreement with the bankruptcy trustee for further consideration by the court.

Reaffirming Debt

If you decide to reaffirm an automobile loan or a home mortgage and an attorney represents you, your attorney must file the reaffirmation agreement with the court. The attorney must certify in writing with the court that he has advised you of your obligations with respect to the reaffirmation. If you decide to reaffirm, the debt will not discharge, and your obligation to pay will remain in force. An extensive set of disclosures is contained in the reaffirmation agreement, including how the debtor plans to repay the debt, how the reaffirmed debt was calculated and a detailed statement of the debtor’s income and expenses.


If you do not plan to reaffirm the debt on your home or automobile or any other secured obligation, be prepared to lose possession of the object. In a liquidation bankruptcy, when there is no reaffirmation agreement in place, items that are collateral for the loan generally are sold to satisfy the creditor. Even if you do not have a loan collateralized by certain personal possessions, the court may order the sale of valuables, such as jewelry, furs and furniture, and use the proceeds to help pay creditors back. You must first surrender the assets for the selling process to commence.


Individuals may have most or all their debts discharged as a result of bankruptcy proceedings. Exceptions to discharge may include support obligations, certain court mandates with regard to willful and malicious injury, judgments applicable to death caused by the debtor if the death occurred while operating a motor vehicle while intoxicated, loans made by a government entity, and certain taxes. Debts you reaffirmed that were subsequently approved by the court will not discharge.


If you are not represented by an attorney and plan to reaffirm a debt, the bankruptcy judge must contemplate the reaffirmation agreement. The judge will not certify the reaffirmation agreement unless she can determine that the reaffirmation will not present an undue hardship for the debtor. The judge must approve the agreement for it to stand. If the reaffirmation is not approved by the court or if an attorney does not represent you, a reaffirmation hearing is scheduled to bring about a resolution of the matter. Before making a final decision about any aspect of a personal bankruptcy filing, you may want to contact a legal professional.

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