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Disclosures by Creditor |
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§524(k) details the disclosures that must be made by a creditor before a
debt may be reaffirmed, including the form and language that must be
used. The disclosures must be made before the
reaffirmation is signed by the debtor.
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Debtor's Affirmations |
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| The debtor
must: (1) sign the agreement (2) state the amount of monthly take home pay and other income, current monthly expenses (including post-bankruptcy obligations and other debts reaffirmed, and the amount available to make the payments on the debt being reaffirmed (3) affirm that entering into the reaffirmation agreement will not impose an undue hardship and that the debtor has the ability to make the payments or, if a presumption of undue hardship arises, how the debtor intends to make the payment
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Attorney's Certification |
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| The debtor's
attorney must certify that: (1) debtor was fully informed and the agreement is voluntary (2) attorney has fully explained the effect of a reaffirmation (3) that either (a) the agreement does not impose an undue hardship or (b) if the presumption of undue hardship applies, in the opinion of the attorney the debtor has the ability to make the payments
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Creditor Payments |
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The creditor
may receive payments before or after the reaffirmation agreement is
filed if debtor believes in good faith the agreement is
effective. Good faith is established if disclosure
requirements of §524(k) are satisified.
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Presumption of Undue Hardship |
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A presumption of undue hardship arises where the net amount
– after deducting monthly expenses from monthly income – is less
than the amount of scheduled payments under the terms of a
reaffirmation agreement. Where the presumption exists, no
reaffirmation shall be disapproved without notice and a hearing, and
such hearing must be concluded before entry of the debtor’s Ch. 7
discharge. This provision does not apply where the other party to
the reaffirmation agreement is a credit union.
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Redemption Payment |
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Redemption
price must be paid at the time of redemption.
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