REAFFIRMATION AGREEMENT PROCEDURES¹

A. IF DEBTOR HAS COUNSEL OF RECORD.

1. Execution of Part C of Reaffirmation Agreements. Debtor’s counsel of record is required to sign Part C of a Reaffirmation Agreement. Part C is entitled “Certification by Debtor’s Attorney.” The Court will treat counsel’s signature on Part C as a representation to the Court that counsel represented the debtor during the course of negotiating the reaffirmation agreement. However, as described in paragraph 2 below, counsel need not make all of the certifications set forth in Part C; and as described in subsection 1(a) below, what is required of counsel in the representation of a debtor in the course of negotiating a reaffirmation agreement is adaptable to the circumstances.²

(a) Representing the Debtor During the Course of Negotiating the Reaffirmation Agreement. Representing the debtor during the course of negotiating the agreement should at a minimum include counseling the debtor in regard to 11 U.S.C. §521(a)(2), working with the debtor to complete the reaffirmation agreement, and assisting the debtor with respect to any negotiations with the creditor. If such negotiations take place, counsel should exercise professional judgment regarding the form of such assistance, which for example could take the form of direct negotiations by counsel with the creditor or counseling the debtor with respect to the debtor’s negotiations with the creditor. Counsel should exercise professional judgment on whether to appear with the debtor at a reaffirmation hearing. The Court does not expect counsel to so appear.

(b) Failure by Counsel for the Debtor to Sign Part C of the Agreement-Orders to Show Cause. If counsel of record for the debtor fails to execute Part C of a Reaffirmation Agreement filed of record, the Court may issue an order to show cause why counsel should not be sanctioned for failure to discharge counsel’s duties in connection with the reaffirmation agreement.

2. Certifications in Part C of the Reaffirmation Agreement. Counsel is expected to exercise professional judgment as to which of the Part C certifications counsel will make. At a minimum, counsel is expected to make the certification that “I have fully advised the debtor of the legal effect and consequences of this agreement, and any default under this agreement.” Counsel may cross out or alter any of the other certifications set forth in Part C, consistent with counsel’s professional judgment.

3. Hearings on Reaffirmation Agreements.

(a) Credit Union – No Hearing. If the creditor is a credit union, and counsel for the debtor executes Part C of a Reaffirmation Agreement (as required under these policies), thereby representing that counsel represented the debtor during the course of -2- negotiating the agreement, the Court will not hold a hearing on approval of the Reaffirmation Agreement, regardless of whether counsel has made all of the certifications set forth in 11 U.S.C. §524(c)(3).³

(b) Non-Credit Union.

(i) Counsel has Completed All Three Certifications – Possible Hearing. If the creditor is not a credit union and debtor’s counsel executes Part C of the reaffirmation agreement and makes all of the certifications set forth in 11 U.S.C. §524(c)(3), the Court will review the Agreement pursuant to 11 U.S.C. §524(m) and hold a hearing on the agreement if the Court determines that a hearing is appropriate.⁴

(ii) Counsel has Not Completed All Three Certifications – No Hearing. If the creditor is not a credit union and debtor’s counsel executes Part C of the reaffirmation agreement, but does not make all of the certifications set forth in 11 U.S.C. §524(c)(3), the Court will not hold a hearing on approval of the Reaffirmation Agreement.⁵

B. IF DEBTOR IS PRO SE. If the debtor is pro se, the Court will set a hearing on all reaffirmation agreements, unless the agreement is deficient on its face (see Section C below), in which case the Court may either take no action or deny approval of the agreement without a hearing.

C. DEFICIENCIES IN THE REAFFIRMATION AGREEMENT. If the Reaffirmation Agreement (i) is not signed by both the creditor and the debtor, (ii) was entered into after the discharge was granted, (iii) was signed by the debtor without the required disclosures required by §524(k), or (iv) omits material information from any section other than Part C, the Court may enter an order denying approval of the Reaffirmation Agreement without notice or a hearing.

Footnotes

1 The procedures described in this paper are based on the Court’s decision in In re Perez, 2020 WL 2737187 (Bankr. D.N.M. 2010).

2 Counseling an individual debtor client in a chapter 7 case in connection with reaffirmation of a debt is among the essential responsibilities of an attorney representing an individual chapter 7 debtor.

3 A hearing is unnecessary for one or both of the following reasons: 1) 11 U.S.C. §524(m), which permits the court to disapprove a reaffirmation agreement after notice and a hearing, even though the attorney has made the certification of no undue hardship, does not apply if the creditor is a creditor union; or 2) the attorney has not made all of the certifications set forth in 11 U.S.C.§ 524(c)(3). See footnote 5.

4 Under 11 U.S.C. §524(m), if the creditor is not a credit union, the court reviews the reaffirmation agreement to determine whether there is presumption of undue hardship. If the presumption arises and has not been rebutted by the debtor to the satisfaction of the court, the court may disapprove a reaffirmation agreement after notice and a hearing even though the attorney has made the no undue hardship certification.

5 A hearing is unnecessary because by the express terms of 11 U.S.C. §524(c)(3) a reaffirmation agreement is not enforceable unless the attorney that represented the debtor during the course of negotiating the agreement makes all of the certifications set forth in that section.