Julio Cesar Fernandez

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
In re:
JULIO CESAR FERNANDEZ
Debtor.
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§
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Case No. 25-30778-cgb
Chapter 7
MEMORANDUM OPINION ON VALIDITY OF REAFFIRMATION
AGREEMENT NOT SIGNED BY DEBTOR’S ATTORNEY
Introduction
In this case, the Chapter 7 debtor sought to reaffirm a debt secured by a vehicle.
Debtor’s counsel, who represented debtor during the course of negotiating the
reaffirmation agreement, declined to certify that the reaffirmation would not impose
an undue hardship on the debtor and that it was in the debtor’s best interest.
Accordingly, this Court holds that the reaffirmation agreement is unenforceable. But
the Court also holds that in entering into the reaffirmation agreement, the debtor
complied with his statutory obligations, so the automatic stay is not lifted under
section 362(h)(1) of the Code.
Dated: November 03, 2025.
__________________________________
CHRISTOPHER G. BRADLEY
UNITED STATES BANKRUPTCY JUDGE
________________________________________________________________
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Background
On June 21, 2025, Julio Cesar Fernandez (the “Debtor”) filed a Voluntary
Petition under Chapter 7 of the Bankruptcy Code [ECF No. 1], commencing the
instant case. In his schedules, Debtor listed Credit Acceptance as a secured creditor
in the amount of $18,589.00, secured by a 2016 Honda Civic.1 Debtor’s Statement
of Intention reflected an intention to retain the vehicle and enter into a reaffirmation
agreement.2
On August 25, 2025, the Debtor filed a reaffirmation agreement with Credit
Acceptance 	Corporation 	(the 	“Creditor”) 	[ECF 	No. 12]. 	The 	reaffirmation
agreement demonstrates a presumption of undue hardship. 3 The reaffirmation
agreement was not signed by Debtor’s attorney.
Creditor’s attorney filed a Motion for Hearing on Reaffirmation Agreement
[ECF No. 13] on August 26, 2025. The Court held a hearing on September 24, 2025.
Analysis
A. The reaffirmation agreement is unenforceable.
When 	a debtor and a creditor enter into 	an 	enforceable reaffirmation
agreement, “the debtor’s obligation on the debt is unchanged by operation of the
Bankruptcy 	Code.” 4 Because a reaffirmation 	agreement 	essentially 	waives a
debtor’s discharge with regard to a particular creditor, courts strictly construe the
statutory requirements found in section 524.5
1 ECF No. 1 at 19.
2 ECF No. 1 at 42.
3 ECF No. 12 at 3, 7.
4 Lindale Nat’l Bank v. Artzt (In re Artzt), 145 B.R. 866, 868 (Bankr. E.D. Tex. 1992); see also In
re Herrera, 380 B.R. 446, 450–51 (Bankr. W.D. Tex. 2007) (characterizing reaffirmation
agreements as “exceptions to the ‘fresh start’ policy of the bankruptcy process”).
5 See, e.g., Sandburg Fin. Corp. v. Am. Rice, Inc. (In re Am. Rice, Inc.), 448 F. App’x 415, 419
(5th Cir. 2011) (per curiam) (“The reaffirmation rules are intended to protect debtors from
compromising their fresh start by making unwise contracts to repay dischargeable debts. Because
of the danger that creditors may coerce debtors into undesirable reaffirmation contracts, they are
not favored under the Bankruptcy Code and strict compliance with the specific terms in
Section 524 is mandatory. A reaffirmation contract which does not comply fully with Section 524
is void and unenforceable.” (quoting Republic Bank, N.A. v. Getzoff (In re Getzoff), 180 B.R. 572,
574 (B.A.P. 9th Cir. 1995))).
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When a debtor is represented by counsel in connection with a reaffirmation
agreement, the agreement 	filed 	with 	the 	court 	must 	be 	“accompanied 	by 	a
declaration or an affidavit of the attorney that represented the debtor during the
course of negotiating an agreement under this subsection.”6 On the cover sheet of
Debtor’s reaffirmation agreement, Debtor checked “Yes” on question 11, which asks
whether 	an 	attorney 	represented 	the 	debtor 	in 	negotiating 	the 	reaffirmation
agreement.7 However, Debtor’s attorney did not sign the required certification.8 As
he explained at the hearing, the attorney, who is a highly experienced practitioner in
this area, understandably felt that he could not ethically certify that the debtor was
able to make the payment, because the proposed monthly payment on the reaffirmed
debt was higher than Debtor’s net monthly income and because the agreement
sought to reaffirm a loan on a car driven solely by Debtor’s adult son.9
This Court is bound by the text of the statute.10 Because the Debtor was
represented by counsel during the course of negotiating the agreement and because
the agreement was not accompanied by the required attorney’s declaration or
affidavit, this Court must find the agreement unenforceable.11 There appears to be
no statutory basis for the Court to step in and determine (as it can with respect to
unrepresented debtors) that the agreement is in fact not an undue hardship and that
it is in the Debtor’s best interests, and thus to render the agreement enforceable.
The Court recognizes that the affidavit requirement creates a dilemma for an
attorney who represents a debtor in negotiating the reaffirmation agreement but does
6 11 U.S.C. § 524(c)(3). The declaration requirements are at 11 U.S.C. § 524(k)(5).
7 ECF No. 12 at 2.
8 ECF No. 12 at 7.
9 See 11 U.S.C. § 524(k)(5)(B).
10 The Court acknowledges that interpretation of section 524 is generally difficult. It has been
memorably compared to “trying to solve a Rubik’s Cube that arrived with a manufacturer’s defect.”
In re Donald, 343 B.R. 524, 529 (Bankr. E.D.N.C. 2006).
11 See Chase Auto. Fin., Inc. v. Kinon (In re Kinon), 207 F.3d 751, 756 (5th Cir. 2000) (finding a
proposed reaffirmation agreement unenforceable when lacking the required declaration of
counsel); see also In re Brinkley, No. 13-00082, 2013 WL 8020916, at *1 (Bankr. D.D.C. Apr. 26,
2013); In re Vaughn, No. 08-02810-TLM, 2009 WL 1474100, at *3 (Bankr. D. Idaho May 27,
2009); In re Rivas, No. 07-13377-RGM, 2008 WL 597893, at *1 (Bankr. E.D. Va. Mar. 3, 2008);
In re Gonzalez, No. 07-11165-RGM, 2008 WL 376266, at *1 (Bankr. E.D. Va. Feb. 11, 2008).
But see In re Mendoza, 347 B.R. 34, 41 n.13 (Bankr. W.D. Tex. 2006) (instructing the clerk of
court to set reaffirmation agreements without an attorney signature for hearing because “[t]he lack
of a signature is the equivalent of the debtor being unrepresented”). This Court respectfully
disagrees with Mendoza. If a debtor checks the box stating that they are represented, they are not
constructively “unrepresented” just because the attorney does not sign off on the agreement.
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not believe that the debtor will be able to make the proposed payments or that the
agreement is in the debtor’s best interests.12 The statute penalizes such a debtor as
compared with an unrepresented debtor, who at least has the opportunity to make
his or her case to the Court that the reaffirmation is not an undue hardship and is in
the debtor’s best interests.13 However, unless a debtor proceeds pro se as to the
reaffirmation agreement,14 the plain text of the statute must apply, and the attorney
must sign off on the agreement for it to be enforceable.
B. The Debtor substantially complied with his statutory obligations.
The next issue the Court must address is whether the unenforceable agreement
nonetheless satisfies Debtor’s statutory obligations and thus prevents the stay from
being lifted under section 362(h)(1) of the Code.
A Chapter 7 debtor is required to file a statement of intention indicating
whether the debtor will surrender the collateral, redeem it, or reaffirm the debt, and
then to perform that intention within 30 days:
(2) if an individual debtor’s schedule of assets and liabilities includes
debts which are secured by property of the estate–
(A) 	within thirty days after the date of the filing of a petition
under chapter 7 of this title or on or before the date of the meeting
of creditors, whichever is earlier, or within such additional time
as the court, for cause, within such period fixes, [a debtor must]
file with the clerk a statement of his intention with respect to the
12 See 11 U.S.C. § 524(k)(5)(B) (“If a presumption of undue hardship has been established with
respect to such agreement, such certification shall state that, in the opinion of the attorney, the
debtor is able to make the payment.”). See also In re Anzaldo, 612 B.R. 205, 217 (Bankr. S.D. Cal.
2020) (imposing sanctions where “counsel’s certification was also not based on an objective
assessment of [debtor’s] ability to repay the reaffirmed debt”); In re Griffin, 563 B.R. 171, 176–
77 	(Bankr. M.D.N.C. 	2017) 	(considering 	sanctions 	on 	attorney 	for 	signing 	reaffirmation
agreement without personal knowledge that debtors could pay); Fed. R. Bankr. P. 9011(b);
Tex. Disc. R. Pro. Conduct R. 3.03.
13 11 U.S.C. § 524(c)(6).
14 Some courts are of the opinion that counsel to a Chapter 7 debtor cannot “unbundle”
reaffirmation agreements from the scope of representation. See, e.g., Bankr. D. Colo. R. 9010-
1(c)(5)(E). Such a situation is not presented here, so the Court need not rule on that point. But it is
not clear why counsel cannot permissibly “unbundle” reaffirmation agreements at the direction of
(and indeed for the benefit of) the client. See Tex. Disc. R. Pro. Conduct R. 1.02(b) (“A lawyer
may limit the scope, objectives and general methods of the representation if the client consents
after consultation.”).
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retention 	or surrender of such 	property and, if applicable,
specifying that such property is claimed as exempt, that the
debtor intends to redeem such property, or that the debtor intends
to reaffirm debts secured by such property; and
(B) 	within 30 days after the first date set for the meeting of
creditors under section 341(a), or within such additional time as
the court, for cause, within such 30-day period fixes, perform his
intention 	with 	respect 	to 	such 	property, 	as 	specified 	by
subparagraph (A) of this paragraph;
except 	that 	nothing 	in 	subparagraphs 	(A) 	and 	(B) 	of 	this
paragraph shall alter the debtor’s or the trustee’s rights with
regard to such property under this title, except as provided in
section 362(h).15
Section 362(h) terminates the automatic stay with regard to personal property if a
debtor does not comply with those statutory requirements:
[The stay shall terminate] if the debtor fails within the applicable time
set by section 521(a)(2)—
(A) 	to file timely any statement of intention required under
section 521(a)(2) with respect to such personal property or to
indicate in such statement that the debtor will either surrender such
personal property or retain it and, if retaining such personal property,
either redeem such personal property pursuant to section 722, enter
into an agreement of the kind specified in section 524(c) applicable
to the debt secured by such personal property, or assume such
unexpired lease pursuant to section 365(p) if the trustee does not do
so, as applicable; and
(B) 	to take timely the action specified in such statement, as it
may be amended before expiration of the period for taking action,
unless such statement specifies the debtor’s intention to reaffirm
such debt on the original contract terms and the creditor refuses to
agree to the reaffirmation on such terms.16
15 11 U.S.C. § 521(a)(2).
16 Id. § 362(h)(1).
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Stated otherwise, if a Chapter 7 debtor chooses to reaffirm personal property
that secures debt, the debtor is obligated to 1) file a statement of intention within
thirty days of filing their petition, 2) enter into “an agreement of the kind specified
in section 524(c),” and 3) do so within thirty days after the first date set for the
meeting of creditors.17 If the debtor does not do so, and does not otherwise surrender
or redeem the property, “the automatic stay is terminated and the collateral is no
longer property of the estate.”18 (Among other consequences, at that point, “any ipso
facto clause in the contract and lien becomes enforceable,”19 which may give the
creditor an immediate right to foreclose on its collateral.)
Here, Debtor filed his case on June 21, 2025. 20 Debtor’s Statement of
Intention, 	listing 	his 	intent 	to 	reaffirm 	the 	2016 	Honda 	Civic, 	was 	filed
contemporaneously with his petition.21 The meeting of creditors was set for July 21,
2025.22 Under the statute, then, Debtor was to “enter into” a reaffirmation agreement
by thirty days later, August 20, 2025.23 The reaffirmation agreement purports to be
signed by Debtor on July 21, 2024,24 and was signed by Creditor on August 25,
2025.25 The agreement was filed with this Court on August 25, 2025 by Creditor’s
attorney.26
The first question is whether Debtor complied with the requirement to “enter
into” a reaffirmation agreement by August 20, 2025. Although Creditor did not sign
the agreement until after the deadline, the Court finds that for the purposes of
17 See id. §§ 362(h); 521(a)(2).
18 In re Riggs, No. 06-60346, 2006 WL 2990218, at *2 (Bankr. W.D. Mo. Oct. 12, 2006) (citing
In re Rowe, 342 B.R. 341, 346 (Bankr. D. Kan. 2006)); 11 U.S.C. § 362(h)(1).
19 Coastal Fed. Credit Union v. Hardiman, 398 B.R. 161, 176 (E.D.N.C. 2008); 11 U.S.C. § 521(d)
(“If the debtor fails timely to take the action specified . . . in paragraphs (1) and (2) of section
362(h) . . . nothing in this title shall prevent or limit the operation of a provision in the underlying
lease or agreement that has the effect of placing the debtor in default under such lease or agreement
by reason of the occurrence, pendency, or existence of a proceeding under this title or the
insolvency of the debtor.”). The type of provision described in § 521(d) is commonly known as an
ipso facto clause. See, e.g., Ipso Facto Clause, Black’s Law Dictionary (12th ed. 2024) (“A
contract clause that specifies the consequences of a party’s bankruptcy.”).
20 ECF No. 1.
21 ECF No. 1 at 42.
22 ECF No. 6 at 2.
23 See 11 U.S.C. §§ 362(h)(1)(A); 521(a)(2)(B).
24 The Court notes that this date was likely mistaken, and that Debtor likely signed the agreement
on July 21, 2025. However, as July 21, 2024, and July 21, 2025, are both before August 20, 2025,
the analysis is the same.
25 ECF No. 12 at 7.
26 ECF No. 12.
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Debtor’s compliance with section 362(h)(1)(B), Debtor timely entered into the
agreement.27
The remaining question, then, is whether in entering an unenforceable
reaffirmation agreement, the debtor has “entered into an agreement of the kind
specified in section 524(c)” that satisfies the statutory requirements.28 Restated, is it
enough for the debtor to merely enter into an agreement, or does it have to be a valid
and enforceable agreement to satisfy the requirements of section 362(h)(1)?
Courts have generally held that the automatic stay does not terminate under
section 362(h)(1) 	when 	an 	unrepresented 	debtor 	enters 	into 	a 	good 	faith
reaffirmation agreement, even if a court declines to approve it (and it is thus
unenforceable). 29 For instance, the United States District Court for the Eastern
District of North Carolina analyzed this issue in Coastal Federal Credit Union v.
Hardiman. 30 The bankruptcy court in that case had declined to approve the
agreement, which tried to reaffirm a car loan, because it imposed an undue hardship
on the debtors and was not in the debtors’ best interest.31 However, the bankruptcy
court “held that the automatic stay still applied, and that [creditor] could not seek to
repossess the vehicle under state law so long as the [debtors] remained current on
their payments and complied with the other requirements of the contract and lien.”32
After engaging in substantial and scholarly analysis, the district court affirmed,
noting 	that 	“a 	contractual 	agreement 	that 	is 	unenforceable 	can 	still 	be 	an
27 See In re Merritt, 366 B.R. 637, 640–41 (Bankr. W.D. Tex. 2007) (finding that a debtor’s
signature on a creditor-prepared reaffirmation constituted “making” the agreement); see also
3 Collier on Bankruptcy P 362.11 (16th ed. 2025) (“Because of the consequences of stay
termination, particularly when done automatically without a stay relief proceeding, courts may be
reluctant to construe the phrase ‘take timely the action’ in section 362(h)(1)(B) in a manner that
would require complete performance of the stated option within the time specified if extenuating
circumstances exist.”). In any case, Creditor did not challenge the agreement on this basis.
28 See 11 U.S.C. § 362(h)(1)(A).
29 E.g., Hardiman, 398 B.R. at 186 (“[Court] approval is necessary for an uncounseled debtor’s
reaffirmation agreement to be enforceable, but entering into an enforceable agreement is different
than entering into an agreement.”); In re Baker, 390 B.R. 524, 529–30 (Bankr. D. Del. 2008); In
re Blakeley, 363 B.R. 225, 231–32 (Bankr. D. Utah 2007) (“The Debtor is not compelled to
surrender possession of the property, the stay is not terminated as to the property, and the
Bankruptcy Code continues to prevent and limit the operation of the contract’s ipso facto clauses.”).
30 Hardiman, 398 B.R. at 166.
31 Id. (summarizing proceedings before bankruptcy court).
32 Id.
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‘agreement.’”33 Thus, the debtors fulfilled their obligations under the Bankruptcy
Code, and the automatic stay remained in place.34
The meaning of “an agreement of the kind specified in section 524(c)” does
not depend on whether or not the debtor is represented by counsel. It would seem to
be an absurd result for the effect of a debtor’s unenforceable reaffirmation agreement
to differ depending on whether the debtor was represented, and that result would
graft a distinction onto the statutory text that the text cannot bear. Certainly,
section 524(c) contains different enforceability requirements based on whether the
debtor was represented (see subsection (3)) or not (see subsection (6)). But the “kind”
of “agreement” is “specified” in the very first clause of section 524(c), which applies
to all debtors, represented or not: “An agreement between a holder of a claim and
the debtor, the consideration for which, in whole or in part, is based on a debt that is
dischargeable in a case under this title.” For this reason, the Court holds as follows:
Just as an unrepresented debtor who enters into a reaffirmation agreement is
considered to have complied with section 362(h)(1) regardless of whether the Court
then approves the agreement and thus renders it enforceable, so too, a represented
debtor who enters into such an agreement has complied with the statute even if his
or her attorney fails to certify it.35
This holding accords with analysis in the Donald case, in which another
Eastern District of North Carolina bankruptcy court noted that the principle of
Hardiman applies just as well to a represented debtor as to an unrepresented one:
“The same result [as in Hardiman] could obtain where a debtor’s good faith
reaffirmation agreement is unenforceable because the attorney who represented the
debtor during the negotiation of the agreement declined to sign the affidavit or
declaration required by § 524(c)(3).”36
33 Id. at 182.
34 Id. at 188.
35 This compelling reading of the plain text of the statute is reaffirmed elsewhere in section 362:
Under section 362(h)(1)(B), the stay does not lift when a debtor attempts to “reaffirm a debt on
the original contract terms and the creditor refuses to agree to the reaffirmation on such terms.”
Under those circumstances, there is no “agreement” at all, much less an enforceable one—yet it is
clear that a debtor is not penalized because they attempted to comply with their statutory
requirements. To impose an enforceability requirement in this section is to add to the text of the
statute and not merely to interpret or apply it.
36 In re Donald, 343 B.R. 524, 541 n.11 (Bankr. E.D.N.C. 2006).
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Thus, 	here, 	Debtor timely 	entered 	into 	a 	reaffirmation 	agreement 	and
therefore complied with his statutory requirements.37 The automatic stay does not
terminate under section 362(h)(1).38
C. The 	Creditor 	retains 	its 	other 	rights 	under 	bankruptcy 	and 	non-
bankruptcy law.
This result does not mean that Creditor is left helpless. As the court in
Hardiman explained, Debtor’s contractual responsibilities and in rem liability
remain intact even after in personam relief, in the form of the discharge, is granted:
Should a debtor fail to uphold a contractual duty to make timely
payments, insure the collateralized vehicle, or otherwise violate any
other provision of the underlying contract (including the lien), the
creditor would be able to seek to repossess the vehicle under state law
if the contract permits.39
Additionally, even before the discharge is entered and the automatic stay is
(automatically) 	lifted, 40 the 	provisions 	of 	section 362(d) 	still 	apply, 	and 	the
automatic stay can still be lifted for cause.41
37 Cf. In re Sanders, No. 11-51240, 2012 WL 692549, at *3–4 (Bankr. W.D. Tex. 2012)
(considering whether a debtor who rescinded a reaffirmation agreement “technically complied
with the statement of intention and performance requirements of section 521(a)(2)” but ultimately
holding that the agreement was “‘unmade,’ triggering section 362(h)”).
38 Any ipso facto clause in the contract is nullified because Debtor substantially complied with his
statutory obligations. See 11 U.S.C. § 365(e)(1); id. § 521(d). However, of course, there may be
other current or future defaults, on which basis Creditor may be able to foreclose on its collateral
once the automatic stay is no longer in place.
To be clear, this Court agrees with prior decisions holding that a “ride-through”—where a
debtor does not elect to surrender, redeem, or reaffirm personal property—“is still not an option
under § 521 post-BAPCPA.” In re Marquez, No. 17-60594-RBK, 2017 WL 5438306, at *3
(Bankr. W.D. Tex. Nov. 13, 2017). However, this situation is distinguishable. It is not a true ride-
through, but rather what is sometimes called a “backdoor ride-through,” because the Debtor has
complied with his statutory obligations. See id.; see also In re Rashidi, No. 24-32587-MVL13,
2025 WL 73067, at *7 (Bankr. N.D. Tex. Jan. 10, 2025).
39 Hardiman, 398 B.R.at 183.
40 11 U.S.C. § 362(c)(2)(C).
41 See Hardiman, 398 B.R. at 183. Of course, if the debt is discharged, Creditor will not be able to
obtain a deficiency judgment against Debtor in personam in the event that it does foreclose upon
the vehicle. See id. at 188.
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Conclusion
Accordingly, IT IS ORDERED that the reaffirmation agreement between the
Debtor 	and 	Credit 	Acceptance 	Corporation 	is 	unenforceable. 	However, 	the
automatic stay is not terminated under section 362(h)(1) as to Debtor’s 2016 Honda
Civic, the subject of the Reaffirmation Agreement.
# # #
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