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Reaffirmation Agreement Pros and Cons

A reaffirmation agreement is a legal document that allows a debtor to reaffirm or continue their obligation to pay a debt even after filing for bankruptcy. While this agreement may seem like a good idea for some, it also has its advantages and disadvantages.


1. Protects Credit Score

One of the primary benefits of a reaffirmation agreement is that it can help protect your credit score. By continuing to make payments on a loan, you can show lenders that you are capable of paying off debts and can increase your credit score over time.

2. Keeps Assets

If you have secured debts, such as a car or a home, a reaffirmation agreement can help you keep those assets. By reaffirming your debts, you agree to continue making payments, which allows you to keep your property.

3. Avoids Default

Reaffirming your debts can help you avoid defaulting on them, which can have significant consequences, such as having your assets repossessed or your wages garnished.


1. Limited Options

Once you sign a reaffirmation agreement, you are legally bound to it. This means that you may be limited in your options to negotiate better terms or explore other debt relief options.

2. Financial Risk

By reaffirming your debts, you are taking a financial risk. If you are unable to make payments, you may be held liable for the full amount of the debt. This can put you in a worse financial situation than if you had not entered into the agreement.

3. No Guarantee

There is no guarantee that signing a reaffirmation agreement will help your credit score. If you are already behind on payments, it may be difficult to catch up, and you may still end up defaulting on the loan.


A reaffirmation agreement can be a useful tool for some debtors, but it is not without its risks. Before signing this document, it is essential to weigh the pros and cons carefully and consult with a financial advisor or bankruptcy attorney. By doing so, you can make an informed decision that aligns with your financial goals and circumstances.