Why do reaffirmation agreements exist?

Reaffirmation agreements are documents that allow individuals to reaffirm their debts, even if those debts were discharged in bankruptcy. They are often used by people who want to keep their properties, such as cars and homes, and can be beneficial in certain situations. So why do reaffirmation agreements exist?

The primary purpose of a reaffirmation agreement is to provide lenders with a guarantee that a debtor will honor the terms of an existing loan after the bankruptcy process has been completed. The agreement serves as legal proof that the borrower will continue making payments on the debt, even though it has been discharged in bankruptcy court. In exchange for agreeing to make payments on time and for an agreed-upon amount, lenders may be willing to not repossess collateral or release liens on secured property (e.g., vehicles).

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