A reaffirmation agreement court hearing is a legal proceeding that takes place when a debtor seeks to reaffirm their debts after filing for bankruptcy. Reaffirmation agreements are contracts that allow debtors to keep their secured debts, such as car loans or mortgages, by agreeing to continue making payments on them.
The purpose of the court hearing is to ensure that the debtor understands the terms of the reaffirmation agreement and that it is in their best interests to enter into the agreement. The hearing is presided over by a bankruptcy judge and typically takes place about a month after the debtor`s bankruptcy filing.
During the hearing, the debtor will be required to provide evidence of their income and expenses, as well as the amount of their debt. The judge will review the information provided and determine whether the reaffirmation agreement is reasonable and in the debtor`s best interest.
If the judge approves the agreement, the debtor must continue to make payments on their secured debts according to the terms of the agreement. If the debtor fails to make payments as agreed, the creditor may repossess the secured property.
It is important for debtors to carefully consider whether a reaffirmation agreement is necessary in their situation. While it may allow them to keep their secured property, it also means that they will continue to owe the debt.
Additionally, if the debtor is unable to make the payments required by the agreement, they may face further financial difficulties. Bankruptcy attorneys can provide guidance on whether a reaffirmation agreement is in the debtor`s best interest and can assist with the court hearing process.
In conclusion, a reaffirmation agreement court hearing is a necessary step in the bankruptcy process for debtors seeking to keep their secured debts. It is important for debtors to carefully consider the terms of the agreement and seek legal guidance before entering into it.