Form B 240

3/99UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF MISSOURI

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| | +---------------+ | |
| | | Debtor's Name | | |
| | +---------------+ | |
| |                   | |
| | Case No.          | |
| +-------------------+ |
| |                   | |
| +-------------------+ |
|                       |
| Chapter               |
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|                       |
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Creditor's Name and Address

  -- --
     
  -- --

**REAFFIRMATION AGREEMENT**

**NOTICE TO DEBTOR:**

**This agreement [gives up the protection of your bankruptcy
discharge]{.underline} for this debt. [As a result of this agreement,
the creditor may be able to take your property or wages]{.underline} if
you do not pay the agreed amounts. The creditor may also act to collect
the debt in other ways. **

**[You may rescind (cancel) this agreement at any time before the
bankruptcy court enters a discharge order or within 60 days after this
agreement is filed with the court, whichever is later]{.underline}, by
notifying the creditor that the agreement is canceled.**

**[You are not required to enter into this agreement by any
law.]{.underline} It is not required by the Bankruptcy Code, by any
other law, or by any contract (except another reaffirmation agreement
made in accordance with Bankruptcy Code § 524(c)).**

**[You are allowed to pay this debt without signing this
agreement.]{.underline} However, if you do not sign this agreement and
are later unwilling or unable to pay the full amount, the creditor will
not be able to collect it from you. The creditor also will not be
allowed to take your property to pay the debt unless the creditor has a
lien on that property. If the creditor has a lien on your personal
property, you may have a right to [redeem]{.underline} the property and
eliminate the lien by making a single payment to the creditor equal to
the current value of the property, as agreed by the parties or
determined by the court.**

**This agreement is not valid or binding unless it is filed with clerk
of the bankruptcy court. If you were not represented by an attorney
during the negotiation of this reaffirmation agreement, the agreement
cannot be enforced by the creditor unless 1) you have attended a
reaffirmation hearing in the bankruptcy court, and 2) the agreement has
been approved by the bankruptcy court. (Court approval is not required
if this is a consumer debt secured by a mortgage or other lien on your
real estate.)**

The debtor and creditor named above agree to reaffirm the debt described
in this agreement as follows.

**[THE DEBT]{.underline}**

Total Amount of Debt When Case was Filed \$[ ]{.underline}

Total Amount of Debt Reaffirmed \$ [ ]{.underline}

Above total includes the following:

Interest Accrued to Date of Agreement \$\_\_\_\_\_\_\_\_\_\_

Attorney Fees \$\_\_\_\_\_\_\_\_\_\_

Late Fees \$\_\_\_\_\_\_\_\_\_\_

Other Expenses or Costs Relating to the

Collection of this Debt (Describe) \$\_\_\_\_\_\_\_\_\_\_

Annual Percentage Rate (APR) \_\_\_\_\_\_\_\_\_\_\_ %

Amount of Monthly Payment \$ \_\_\_\_\_\_\_\_\_\_

Date Payments Start \_\_\_\_\_\_\_\_\_\_\_\_

Total Number of Payments to be made \_\_\_\_\_\_\_\_\_\_\_\_

Total of Payments if paid according to schedule \_\_\_\_\_\_\_\_\_\_\_\_

Date Any Lien Is to Be Released if paid

according to schedule \_\_\_\_\_\_\_\_\_\_\_\_

The debtor agrees that any and all remedies available to the creditor
under the security agreement remain available.

All additional Terms Agreed to by the Parties (if any):
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Payments on this debt \[were\]\[were not\] in default on the date on
which this bankruptcy case was filed.

This agreement differs from the original agreement with the creditor as
follows:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**[CREDITOR\'S STATEMENT CONCERNING AGREEMENT AND SECURITY/COLLATERAL
]{.underline}**

**[(IF ANY)]{.underline}**

Description of Collateral. [If applicable, list manufacturer, year and
model. ]{.underline}

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Value \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Basis or Source for Valuation
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Current Location and Use of
Collateral\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Expected Future Use of Collateral
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Check Applicable Paragraphs:

\_\_\_\_\_ Any lien described herein is valid and perfected.

\_\_\_\_\_ This agreement is part of a settlement of a dispute regarding
the dischargeability of this debt under section 523 of the Bankruptcy
Code (11 U.S.C. § 523) or any other dispute. The nature of dispute is [
]{.underline}.

**[DEBTOR]{.underline}[']{.underline}[S STATEMENT OF]{.underline}**

**[EFFECT OF AGREEMENT ON DEBTOR]{.underline}[']{.underline}[S
FINANCES]{.underline}**

My Monthly Income (take home pay plus any other income received) is \$
\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

My current monthly expenses total \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_, not
including any payment due under this agreement or any debt to be
discharged in this bankruptcy case.

I believe this agreement \[will\]\[will not\] impose an undue hardship
on me or my dependents.

**[DEBTOR]{.underline}[']{.underline}[S STATEMENT CONCERNING DECISION TO
REAFFIRM]{.underline}**

I agreed to reaffirm this debt because
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

I believe this agreement is in my best interest because
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

I \[considered\]\[did not consider\] redeeming the collateral under
section 722 of the Bankruptcy Code (11 U.S.C. § 722). I chose not to
redeem because [ ]{.underline}I \[was\]\[was not\] represented by an
attorney during negotiations on this agreement.

**[SIGNATURES]{.underline}**

(Signature of Debtor) Date (Name of Creditor)

(Signature of Co-debtor) Date (Signature of Creditor Representative)
Date

[ ]{.underline}**[CERTIFICATION BY DEBTOR\'S ATTORNEY (IF
ANY)]{.underline}**

I hereby certify that 1) this agreement represents a fully informed and
voluntary agreement by the debtor(s); 2) this agreement does not impose
a hardship on the debtor or any dependent of the debtor; and 3) I have
fully advised the debtor of the legal effect and consequences of this
agreement and any default under this agreement.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Signature of Debtor\'s Attorney, if any) Date

B 240

**REAFFIRMATION AGREEMENT**

**[Purpose of the Form]{.underline}**

The ultimate goal of an individual debtor in a bankruptcy proceeding is
to obtain a discharge of debts. However, there are times when a debtor
does not wish to discharge a particular debt. This usually occurs when a
debt is secured by personal property, such as a car.

Nothing prevents a debtor from voluntarily repaying all or part of a
debt. However, nothing can force a debtor to repay a discharged debt
unless the debtor signs a reaffirmation agreement. Because the debtor is
not legally obligated to repay a discharged debt, creditors whose debts
are secured by collateral, such as a car, may insist that the debt owed
to them be reaffirmed, or they may foreclose on the collateral.

To protect the debtor from undue pressure or from reaffirming a debt
that is not in the debtor\'s best interest, the law requires the
attorney for the debtor to carefully explain the debtor\'s rights to the
debtor. If the debtor is not represented by an attorney, the law
requires the court to review the record to determine whether the
reaffirmation agreement imposes an undue burden on the debtor or a
dependent of the debtor and whether the agreement is in the debtor\'s
best interest.

Form B 240 has been revised so that it may be used both by debtors who
are represented by an attorney during the course of negotiating the
reaffirmation agreement and by those debtors who are not represented by
an attorney. The revised form incorporates requirements added to the
Bankruptcy Code by the Bankruptcy Reform Act of 1994 and also adopts
many of the suggestions made in the final report of the National
Bankruptcy Review Commission.

[This agreement should only be signed if the debtor intends to again
become legally responsible for a debt which would otherwise be
discharged in a bankruptcy proceeding.]{.underline}

**[Applicable Law and Rules]{.underline}**

1\. Sections 524(c) and (d) of the Bankruptcy Code (11 U.S.C § 524(c),
(d)) govern reaffirmation agreements.

2\. Section 524(c)(1) provides that, in order to be enforceable, a
reaffirmation agreement must be made before the court grants a
discharge. (An agreement is \"made\" when it is signed by both parties.)

3\. To protect a debtor from undue pressure exerted by a creditor who
seeks to force the debtor to reaffirm a debt, section 524(c) permits the
debtor to rescind a reaffirmation agreement at any time prior to
discharge or within 60 days after the agreement is filed with the court,
whichever occurs later, by giving notice of rescission to the creditor.

4\. As an added protection, if the debtor is represented by an attorney,
section 524(c)(3) provides that the attorney must sign an affidavit or
declaration that the debtor is aware of all the debtor\'s rights, that
the agreement is voluntary, that the repayment of the debt will not
cause any undue hardship to the debtor or a dependent of the debtor, and
that the attorney has fully advised the debtor of the legal effects and
consequences of the agreement and of a default under such an agreement.

5\. Section 524(c)(3) requires that reaffirmation agreements be filed
with the court. Because filing triggers both the beginning of the
rescission period and the scheduling of the reaffirmation hearing, the
agreement should be filed promptly.

6\. If the debtor is not represented by an attorney, section 524(c)(6)
states that the reaffirmation agreement must be approved by the court,
which will determine whether the reaffirmation will impose an undue
hardship on the debtor or a dependent of the debtor, and whether the
reaffirmation is in the best interest of the debtor. Some courts will
only make these findings after a hearing. The debtor who is not
represented by an attorney should obtain a copy of the local rules from
the clerk and check the rules regarding the procedure for approval of a
reaffirmation agreement.

7\. Fed. R. Bankr. P. 4008 dictates that a hearing to explain the effect
of a reaffirmation agreement must be held on not less than 10 days
notice to the debtor and the trustee and within 30 days following the
entry of the order granting or denying a discharge.

B 240

continued

8\. In order to give the court sufficient time to schedule the
reaffirmation hearing within the 30-day period and give 10 days notice,
the agreement should be filed as soon as possible after it is made and
no later than 15 days after the entry of the discharge. Rule 4008
requires that a motion by the debtor for approval of a reaffirmation
agreement be filed before or at the hearing. As discussed above, the
agreement must be made before the discharge is granted.

9\. Fed. R. Bankr. P. 4004(c) provides that the court may defer entry of
the order granting the discharge on the debtor\'s motion. This gives the
debtor additional time to make a reaffirmation agreement before the
court grants the discharge.

**[Instructions for the Debtor and Creditor]{.underline}**

Form B 240 is designed so that it may be used both by debtors who are
represented by an attorney during the course of negotiating the
reaffirmation agreement and by those debtors who are not represented by
an attorney.

The debtor should review carefully the "Notice to Debtor" which is
printed on the first two pages of the form.

The debtor's name and the case number should be written in the
appropriate blanks at the top of the first page of Form B 240, which is
intended to be self-explanatory. The form contains sections to be
completed, signed, and dated by the debtor, the creditor, and the
debtor's attorney --- if the debtor is represented by an attorney. The
form requires information on the nature and amount of the debt, any
security or collateral for the debt, the documents which created and
perfected the security interest or lien (unless they are attached), the
debtor's finances, and the debtor's decision to reaffirm the debt. In
addition, if the debtor is represented by an attorney, the attorney must
make the certification required by 11 U.S.C. § 524(c)(3) before the
agreement is filed with the court. The certification is set out on the
last page of the form.

If court approval of the reaffirmation agreement is required because the
debtor was not represented by an attorney during the negotiation of the
agreement, a motion should be filed requesting court approval of the
agreement. Form B 240M may be used for this purpose. In addition, unless
the motion is filed by the debtor and creditor jointly, a copy of the
motion and a completed copy of Form B 20A, Notice of Motion or
Objection, should be served on the other party and filed with the court.
The original agreement must be filed with the motion and notice.

**[General Information for the Clerk]{.underline}**

Under section 524 of the Code, the court is no longer required to hold a
discharge hearing. Nor does the court need to review and approve a
reaffirmation agreement, if the debtor is represented by an attorney and
the agreement is made and filed before the discharge order is entered.

If the debtor is not represented by an attorney, court action is
necessary.

Although Form B 240 no longer contains a motion for court approval of
the reaffirmation agreement and a section in which the judge may approve
or disapprove the agreement, Form

B 240M, Motion for Approval of Reaffirmation Agreement, and Form B 240O,
Order Approving Reaffirmation Agreement, may be used for these purposes.
The moving party should complete Forms B 240M and B 20A, Notice of
Motion or Objection, serve them on the other party, and file them with
the court, together with the original agreement document. If the debtor
and creditor file the motion jointly, the notice is not required.

Many courts require that a debtor who is not represented by an attorney
appear at a reaffirmation hearing even when the reaffirmation agreement
and motion are filed prior to the entry of the discharge order, so that
the judge may make inquiries of the debtor. Other courts simply forward
the agreement and motion to the judge for review and signature. If the
procedure is fixed by local rule, a copy of the rule should be given to
debtors with this form and instructions. Form B 240O may be used by the
judge to approve or disapprove the reaffirmation agreement.

In order to avoid having debtors attempt to reaffirm debts long after
the discharge is granted, section 524(c)(1) requires that the agreement
be made before the discharge is granted. Section 524(c)(3) requires that
the agreement be filed with the court. Because Rule 4008 requires a
reaffirmation hearing to be held, on ten days' notice to the debtor and
trustee, no later than 30 days after the entry of the discharge,
reaffirmation agreements must be filed in time to schedule and give
notice of the hearing.