Credit Card Glossary: Terms and Definitions
Reaffirmation is a procedure by which someone in bankruptcy or default agrees to continue to pay off a loan. Credit experts advise consumers to be very cautious in their communications with debt collectors on old debt. If a consumer agrees that they owe the debt, or pay off a small portion of it, the debt has been reaffirmed. The consequence of reaffirming a debt is the statute of limitations is reset to zero, lengthening the time that a creditor can successfully sue to get a judgment forcing payment.
Terms from A-Z
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