A debtor may want to settle a debt even if that debt would be settled in the event of bankruptcy. For example, a debtor may want to keep a vehicle. As a promise to settle this debt, a debtor must enter into a stand-by agreement with the creditor. Confirmations are voluntary and are not required by law. It is recommended that the debtor carefully consider whether or not the agreed payments can be made before entering into a stand-by agreement. If a debtor is not in arrears and decides not to sign a stand-by agreement, many lenders recognize the ability to withhold and pay the debt[1] by continuing regular monthly payments. However, this option is not recognized by all lenders, so it is important to know the lender`s position on confirming the debt to the ”keep and pay” option. The reaffirmation agreement is nine pages long. It is divided into several parts, each marked with a letter. Part A contains instructions and notices for a debtor. Part B is an actual stand-by agreement signed by the debtor and a creditor.

Part C is intended to be certified by the debtor`s lawyer. In Part D, a debtor makes a statement in support of the stand-by arrangement. Finally, Part E represents the application for judicial authorization. The statements are strictly voluntary. If you wish to confirm (accept repayment) of a particular debt, you must enter into a written agreement with the creditor that legally obliges you to pay all or part of an excusable debt (extinguished by bankruptcy). The form for this is Form 240A Reaffirmation Agreement. Both the creditor and the debtor must complete the form in its entirety, which indicates the nature of the debt, the value of the guarantee and the reason for the confirmation. Both parties to the affirmation must sign on the appropriate signature lines.

Since you will not be represented by a lawyer, confirmation will be automatically set for the hearing and you will receive written notification of the date and time of the hearing. You must appear at the hearing where the judge will decide whether it is in your best interest to confirm it based on your situation and the nature of the confirmation. For example, the court may not allow you to confirm a $3,000 debt for a vehicle that could be worth $1,000. Confirmation document form. This is an official form for federal forms and can be used in bankruptcy proceeding forms. It is a legal form that was authorized by the U.S. Bankruptcy Court on April 1, 2010 and used nationwide. To date, no separate form submission guidelines are provided by the issuing service. A stand-by agreement is considered defective if Part E is not concluded.

If a completed E-part is not submitted within the default period (15 days), the contract will be damaged. You have the right to revoke (cancel) any confirmation at any time before the start of your termination or within 60 days of filing the stand-by agreement with the court, whichever comes later. To cancel a stand-by agreement, you must send written notice to the creditor that you are withdrawing your decision to confirm and revoke the agreement. Send the original letter to the creditor and a copy to the clerk`s office to be part of your file. Complete the Reaffirmation Agreement Form All reaffirmations must be submitted using the official form B27, the reaffirmation cover sheet. The reaffirmation agreement (official form B240A) has been amended with effect from 1 December 2009. In order to give claimants sufficient time to implement the amendment to the form, the court grants a transitional period of six months during which the old (1/07) or new (12/09) version of the reaffirmation agreement can be filed. Note: As of April 1, 2010, the newly amended form of the Stand-By Arrangement will become binding. All appeal agreements that do not involve credit unions or real estate are automatically scheduled for the hearing, whether or not there is a presumption of unreasonable harm.

If the stand-by agreement involves real estate and/or a credit union, no further action will be taken. Any agreement on confirmation must be reached before the receipt of the discharge. If you are in the process of confirming a debt and believe that it will not be filed before the release period, notify the Clerk`s office in writing to delay the submission of debt relief until the confirmation has been submitted. Part E is the debtor`s application for court approval and must be signed by debtors who are not represented by a lawyer. A standstill agreement will be considered defective and will be deleted if: • It is not filed on Official Form 240 A (1/07) or if • The debtor and/or creditor does not sign any of the required parts of the contract. Typically, a stand-by agreement is filed with the court before a person goes legally bankrupt. Parts A-E – including the debtor`s disclosures, the stand-by agreement, the lawyer`s certificate, the debtor`s statement in support of the confirmation and the application for judicial approval of the document required to confirm a debt. The instructions appear in the confirmation form. A stand-by agreement in U.S. bankruptcy law refers to an agreement between a creditor and the debtor that waives debt forgiveness of a debt that would otherwise be settled in an ongoing bankruptcy proceeding. A duly signed stand-by arrangement, submitted in a timely manner, modifies debt relief so that it becomes unusable against the debt in question. Most of the legal powers for stand-by agreements are codified in 11 U.S.C§ 524(c).

All questions and comments are available to the public. Please do not post private or sensitive information such as names, addresses, phone numbers, emails or social media links, financial details, etc. The stand-by agreement is submitted to the court where the hearing takes place and then sent to the creditor. Its copy is kept by the debtor for the records. Part A – Debtor Disclosures: Summary of The Stand-By Agreement. Fill out this section and provide the details of the agreement: amount to be confirmed, percentage, payment to be made. Part B – The stand-by agreement requires the signature of the creditor`s representative and the debtor(s). The agreement allows a debtor to continue the business relationship or retain the assets provided as debt security. Although secured debts are also cancelled after an individual has filed for bankruptcy, a creditor still has the right to sell collateral assets. To avoid this, a person can enter into a stand-by agreement with a lender.

However, such an agreement has some drawbacks. First, if a person retains the debt and is unable to repay it, a creditor can repossess the property. Second, after a person has declared bankruptcy, he must wait eight years before he can cancel debts under Chapter 7.So, consider entering into a stand-by agreement: the reaffirmation agreement is a contract between a creditor and a debtor that is concluded after insolvency proceedings. The agreement must also be signed by the lawyer and submitted to the court. It is not necessary for the Court of Justice to approve a stand-by agreement applicable to consumer debts secured by immovable property. .