Author Question: What is a reaffirmation agreement? What does the bankruptcy court require when a debtor wants to ... (Read 66 times)

asmith134 · **on:** Aug 2, 2018

What is a reaffirmation agreement? What does the bankruptcy court require when a debtor wants to enter this type of agreement with a creditor? Why would a debtor ever want to enter into this type of agreement?

What will be an ideal response?

Question 2

In the case of a corporate debtor, one or more of the corporation's directors, officers, or secretaries may qualify as a(n)

A) Valid creditor
B) Insider
C) Outsider
D) Bourgeoisie

duy1981999 · **Reply #1 on:** Aug 2, 2018

Answer to Question 1

A debtor may strike an agreement with a creditor to waive the discharge of the debt in a bankruptcy proceeding. This is known as a reaffirmation agreement. For example, imagine one of the debtor's debts is a car loan and she does not want it to be discharged. Instead, she wants to keep her car by continuing her monthly payments. To achieve her objective, the debtor may enter a reaffirmation agreement with the creditor before the discharge is entered. The debtor and the creditor must complete and sign a Form 240A Reaffirmation Agreement, which includes the nature of the debt, value of the collateral, and reason for reaffirmation. Form 240 must also be accompanied by a reaffirmation cover sheet. The debtor and creditor have to appear before a bankruptcy judge who determines whether it is in the best interest of the debtor to reaffirm the debt. A creditor who enters into a reaffirmation agreement with a debtor retains all of its legal and equitable rights to collect the debt and may pursue the debtor in satisfaction of this obligation.

Answer to Question 2

B