Bankruptcy law generally allows you to break your contracts with creditors to help you get out of debt. But sometimes you may want to keep a home mortgage or car loan as you work to recover from your bankruptcy. Reaffirmation is a process in bankruptcy where you agree to remain responsible for the debt or loan so that you can keep the property (house or car) that is securing your repayment of the loan.

In reaffirmation, you and the creditor enter into a new contract—usually on the same terms—and submit it to the bankruptcy court for approval. You will have to be current on your payments of the loan, and you must be eligible for a bankruptcy exemption that will allow you to protect all of the equity in the property securing the loan you want to reaffirm.

In Maryland, as in other states, bankruptcy law allows individuals to discharge certain debts, but they may choose to keep some secured debts like a home mortgage or car loan through a process called reaffirmation. Reaffirmation is an agreement between the debtor and the creditor to continue the payment of the debt despite the bankruptcy. The debtor agrees to remain legally responsible for the debt, and the creditor allows the debtor to keep the property securing the loan. To reaffirm a debt, the debtor must be current on payments and must have sufficient bankruptcy exemptions to cover the equity in the property. The reaffirmation agreement must be entered into voluntarily, must not place an undue burden on the debtor or their dependents, and must be in the debtor's best interest. The agreement must be filed with the bankruptcy court and, depending on the circumstances, may require court approval after a hearing where the debtor's ability to afford the payments is assessed. If the debtor's attorney provides a declaration attesting to the agreement's voluntariness and the debtor's informed decision, a hearing may not be necessary. It's important to note that reaffirming a debt is a serious financial decision and debtors are often advised to consult with an attorney before entering into a reaffirmation agreement.