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 Maine, as in other states, bankruptcy law allows individuals to discharge certain debts but also offers the option to reaffirm debts, particularly when the debtor wishes to retain secured property such as a home or vehicle. Reaffirmation is a voluntary agreement between the debtor and the creditor to continue the payment obligation on a debt that would otherwise be discharged in bankruptcy. The reaffirmation agreement must be entered into before the discharge of debts is granted and is subject to approval by the bankruptcy court. The debtor must be current on the loan payments and must have sufficient exemptions to cover the equity in the property. It's important to note that reaffirming a debt is a serious financial decision and debtors are often advised to consult with an attorney to fully understand the implications and ensure that the reaffirmation is in their best interest.