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 Oregon, 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 obligation on the secured debt, allowing the debtor to retain the property. The reaffirmation agreement must be entered into voluntarily and must not place an undue burden on the debtor or their dependents. It must be in the debtor's best interest and is subject to approval by the bankruptcy court. To reaffirm a debt, the debtor must be current on payments and have sufficient exemptions to cover the equity in the property. If the debtor's attorney provides a declaration attesting that the reaffirmation agreement does not impose an undue hardship and is in the debtor's best interest, the court may approve the agreement without a hearing. However, if the debtor is not represented by an attorney, the court will typically hold a hearing to ensure the legal requirements are met.