Rescind Reaffirmation

[Walnut]

If we do that for a car loan, does it rework the means test? We plan to rescind it (see thread in Buying a Car After Discharge for details/story) just before the deadline for objections.

[hopefulrelief]

I would love to know the answer to this as well!!

[lrprn]

If we do that for a car loan, does it rework the means test? We plan to rescind it (see thread in Buying a Car After Discharge for details/story) just before the deadline for objections.

If during the reaffirmation negotiations you talked your creditor into lowering the overall amount you owed on the loan or reduced the APR%, that could lower the total loan amount and that could have an impact on your means test.

However, typically most filers keep the original loan amount and APR % on their reaffirmation agreement. In that case, if you keep the asset and keep making payments on time every month, those payments are the same whether you reaffirm or not. In this situation I can't see where there would be an impact on the means test. I'm sure someone will correct me if I'm overlooking something obvious here in my sleep-deprived state

[BKTango]

I would think if you had a car for say $350 a month and you reaffirmed the debt then changed your mind and recinded the reaffirmation it shouldn't change your means test because you would still be making payments on that car, as long as the dealer let you.

BUT if you recind the reaffirmation, and surrender the car or they take it back for that reason... then I can see where now that $350 will or could be added back into your disposable income because now you don't have that payment going out. The trustee is not going to look the other way knowing you have $350 (ex.) disposable income just freed up.

[Walnut]

Actually, since we intend to purchase another car, it seems it does not get recalculated, plus the means test assumes a bunch of stuff on the day of filing. Nothing else has changed and the payment is still below the IRS minimum, so we can spend up to that amount, and any over that would push us deeper in the red.

The only problem we seem to have is figuring out how to rescind it.

[lrprn]

The only problem we seem to have is figuring out how to rescind it.

According to this reaffirmation court document from Rhode Island at http://64.233.167.104/search?q=cache...nk&cd=2&gl=us:
"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 islater, by notifying the creditor that the agreement is cancelled."

Looks like all you may have to do within the 60 days is ask your lawyer contact the creditor and notify them that you rescind the reaffirmation agreement. Check with your lawyer to be sure this is all that has to be done in your state.

[SinkingFast]

As far as the Means Test,............... Your attny should have amortized the payments out over 60 months anyway. There's already been Court Decisions that allow contractually liable payments to be considered even when the underlying asset is being surrendered.

Looks like all you should have to do is have your attny contact the Lender, or send a note on your behalf that the Reaffirmation Agreement has been canceled.

[Walnut]

Yeah, we sent a certified letter last week to the address on the reaffirm agreement - but have yet to receive a return receipt. So, the 60 day period ends on 4/28 and the last day for objections is 5/1. Will just call the bank again on 4/27 and tell them to enter my cancellation on my account and make arrangements post discharge to surrender the van. I have another vehicle to also surrender (not reaffirmed) and will contact that bank also after discharge. They are based in Ohio (local bank) and we now live in Texas. Not sure how that one will play out.