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A reaffirmation agreement in Chapter 13 bankruptcy refers to an agreement between a debtor and a creditor that reaffirms the debtor`s obligation to repay a debt. It is commonly used to keep assets that are secured by a debt, such as a car or a house, in the debtor`s possession, by reaffirming the debt and agreeing to continue making payments.

Chapter 13 bankruptcy is designed to help individuals reorganize their debts and repay them over a period of three to five years. During this time, the debtor is required to make regular payments to a trustee, who distributes the payments to creditors according to a court-approved plan.

If a debtor wants to keep an asset that is secured by a debt, such as a car or a house, they may be required to sign a reaffirmation agreement. This agreement essentially reestablishes the terms of the original loan and requires the debtor to continue making payments on it.

The purpose of a reaffirmation agreement is to protect the creditor`s interest in the asset, while allowing the debtor to keep the asset in question. In most cases, the creditor will only agree to a reaffirmation agreement if the debtor can provide evidence that they have the financial resources to continue making payments on the debt.

Reaffirmation agreements can be a useful tool for debtors who want to keep their assets while going through Chapter 13 bankruptcy. However, they can also be risky, as they can make the debtor personally liable for the debt in question. If the debtor fails to make payments on the debt, the creditor can repossess the asset and pursue the debtor for any remaining balance.

If you are considering filing for Chapter 13 bankruptcy and are concerned about keeping your assets, it is important to speak with an experienced bankruptcy attorney who can help you understand your options. A qualified attorney can help you negotiate a reaffirmation agreement that works for you, while ensuring that you are protected throughout the bankruptcy process.

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