What is ReAffirmation?

[6ftladycop]

All of you guys have used this term a lot here on this forum. Reaffirmation....what does it really mean?

[SinkingFast]

Say you have a car loan or a mortgage. Even furniture loans. You agree with the Lender to maintain the Loan thru out and after your BK. You Reaffirm that you are going to pay the Lender back. You and the Lender sign a written agreement stating interest rate, term, and monthly payments.

That's called a Reaffirmation Agreement.

The Reaffirmation Agreement has to be signed by you and the Lender AND be filed with the Court prior to Discharge or the debt is technically Discharged in your BK.

[CindyLou]

You then become responsible for that debt in full and it is not discharged in bankruptcy.

[6ftladycop]

Assuming and Affirming....are these both different?

I hate to keep asking questions, but I still am having trouble understanding the difference between things here that seem the same but have different meanings alltogether.

I received a letter from GMAC about my leased vehicle and the letter was titled Lease Assumption Agreement.....What is the difference legally between assumption and affirmation?

[JRScott]

Reaffirmation: This is the legal term when you reaffirm the debt with the creditor. You state that you accept the terms and continue to assume responsibility for the debt. You must be able to show to the court that the reaffirmation is not an undue burden on your finances or most lawyers/judges/trustees will not sign it.

Redemption: You pay the full market value within a set time frame I can't think of before the BK discharge though. The property is yours then.

Surrender: The final legal term that you can do with secured property. You give the property back and the debt is discharged.


I can't answer the lease question as I've never had a lease , hopefully someone else will be by.

[JollyGG]

When you lease you are essentially renting the car. You pay for the months you use it therefore there is no loan to reafirm.
The lease assumption agreement is basically you saying you want to continue renting (leasing) the car.

[6ftladycop]

Assuming and Affirming....are these both different?

When you lease you are essentially renting the car. You pay for the months you use it therefore there is no loan to reafirm.
The lease assumption agreement is basically you saying you want to continue renting (leasing) the car.

Thank you so much. That cleared it up for me. I will send back the letter from GMAC about the car. I was never behind, but the bankruptcy division at GMAC said that legally they had to send me this letter and as soon as I signed it and sent it back, they would send me my payment book. I already paid for this month anyway.