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 North Dakota, as in other states, bankruptcy law allows individuals to discharge certain debts but also offers the option to reaffirm debts for property they wish to retain, such as a home or vehicle. Reaffirmation is a voluntary process where the debtor agrees to continue paying a debt despite the bankruptcy filing, thereby keeping the collateral associated with the loan. To reaffirm a debt, the debtor must sign a reaffirmation agreement with the creditor, which outlines the terms of the continued debt obligation. This agreement must then be filed with the bankruptcy court. The debtor must be current on the loan payments and 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. The bankruptcy court must approve the reaffirmation agreement, and the debtor has the right to rescind the agreement within a certain period after signing.