During Chapter 7 Bankruptcy a debtor is allowed under certain circumstances to reaffirm a debt. What this means is that the debtor will be allowed to continue to pay a debt so that he/she can continue to keep property such as a house or a vehicle. In Chapter 7 bankruptcy, a debtor who desires to reaffirm a debt must get the approval of the bankruptcy court. The bankruptcy court will only allow a debtor to reaffirm a debt if the debtor can afford it and if doing so would be in the debtor's best interests.
For example, a debtor who earned $3,000 a month but had $2,900 in monthly expenses would most likely not be allowed to reaffirm a debt that would cost him/her $200 a month because it would put the debtor $100 into the hole. On the other hand, if that same debtor wanted to reaffirm a debt that would cost him/her $50 a month, the bankruptcy court would most likely approve of the plan.
Most debtors use reaffirmation to keep their home or car during bankruptcy while discharging other unsecured debt such as credit cards, medical bills and personal loans. If you are considering reaffirming a debt during bankruptcy, discuss your options with your bankruptcy attorney before you file. The bankruptcy attorney will take a close look at your budget and let you know if you would likely qualify for a reaffirmation or not.