Reaffirmation
Barron's Banking Dictionary:
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Reaffirmation
Voluntary agreement by a debtor in bankruptcy to pay all or part of a debt, even though the debtor is not legally obligated to do so, and cannot be compelled by his creditors to repay a debt. Under the bankruptcy code, the debtor's attorney files a statement with the court stating that reaffirmation will not harm the debtor financially. Debt reaffirmations are not allowed in Chapter 13 Wage Earner Plans.
Investopedia Financial Dictionary:
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Reaffirmation
An agreement made between a debtor and a creditor to repay some or all of a debt. Reaffirmations are made on a purely voluntary basis by the debtor. The bankruptcy code stipulates that the debtor's attorney must file a statement with the court affirming that he or she can repay the debt without incurring further personal financial harm.
Investopedia Says:
Reaffirmations cannot legally require the debtor to repay the debt. Lenders have no real leverage from them, and can only rely on the good faith intent of the debtor to repay the debt. This type of arrangement is prohibited under Chapter 13 Wagearner plans.
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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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