Relief of stay confusion???

[brkasajke]

We chapter 7 2/12/08 and had our 341 meeting 3/06/08, now we wait. I come here everyday! It's nice to know that the boat isn't actually sinking and we aren't alone in it either, so thanks for that. Now my question... My husband co-signed for my son to buy a car two years ago. My son has made all the payments, the payment book is in his name only. We didn't put the car as an asset. We didn't know until they listed themselves as a creditor it was even an issue. We went ahead and amended everything and added them. Our attorney then sent them a letter stating that the car didn't belong to us and that we would not reaffirm the loan. Now they have entered a motion for relief of stay, what does that mean? It says "since the vehicle is not in the possession of the bankrupt cosigner their interest are not adequetely protected and they request relief of stay." WHAT in the heck does that mean?? The motion was sent from their attorney to us, not our attorney like it was supposed to be (I thought). So as of right now our attorney doesn't even know about it and of course it's the weekend. I would rather not spend the whole weekend worrying about if it means they want to take my kids car or not?? He has never been late or missed a payment, has a good job and lives on his own. So can they do that?

[HHM]

Your attorney knows because the motion was e-filed. The attorney gets and e-mail notice of EVERYTHING that is filed in your case.

Basically, (no offense), you are screwed. They are forcing the issue of reaffirmation, and unfortunately, you probably don't have many options but to reaffirm. (after all, the whole reason for a co-signer is to protect against the default of the main borrower). Since your son could not qualify on his own (hence the need for co-signer) the BK of a co-signer is a breach of the loan agreement and they can exercise their lien rights.

You need to discuss this with your attorney, but you are probably going to have to reaffirm in order for your son to keep the car. Sorry

[lrprn]

As long as your son keeps making his car payments on time, if you reaffirm (if you can still do that now - ask your lawyer) it will not change what you have been doing up to now. Only if your son should stop making payments would you be expected to make the payments instead (exactly what would have happened before you filed as well).

[brkasajke]

Thanks for your quick response and wisdom! I figured we were screwed on this one. I don't care if we reaffirm, but our attorney seemed to think it wasn't a good idea. The loan was two years ago, he was in college with no credit. His credit score now is probably better than ours added together. We'll do what we have to do to keep his car since I'm sure it's not possible for him to do anything to rectify the situation. My husbands ignorance on the subject wasn't his fault. Now, my other question. Was it okay for them to send that 10 pg confusing document to us? I just want to be ready if this could happen again.

[mcdulph]

Hubby (cosigner) is in 13 not 7 but...

...we had a different experience. His attorney refuses to do reaffirmations (probably a wise choice), so hubby is "surrendering" his interest in my Jeep, not reaffirming it. (He filed his Ch 13 alone).

And I've been assured that as long as **I** keep making the payments, no one can take the Jeep away from me.

Makes sense...why should the lender get all of their money AND still be allowed to repossess the collateral?

Hope that helps!

[HHM]

Let's back up, who is actually on the title of the car, you or your son? If your son is on the TITLE, you might be able to mount a defense to the Motion. You have 2 options.

1. You "could" take the chance and simply let the motion go unopposed and see if they will really repo. As has been mentioned, your son is not in default.

2. Oppose the motion to lift stay. Assuming your sons name is on the title, then the asset is not property of the estate which would render the Motion Moot. (but, keep in mind, they may still have the right to repo anyway)

Also, break out the original loan agreement, see what sort of clause they might rely on in order to repo. Yes, there has probably been a technical breach (BK of the co-signer), but you need to see what kind of default provisions there are in the note.

[brkasajke]

My son and my husband's name are on the title of the car.My son's is first and my husband is the cosigner underneath. You would think Volvo finance would be more concerned with their $40,000 defaults,not a meesley $4,000 clunker that's in the shop more than it's on the road they must need lunch money or something! Had to vent ,sorry. I'll pull the loan agreement now and see what it says. Thanks!

[HHM]

My son and my husband's name are on the title of the car.My son's is first and my husband is the cosigner underneath. You would think Volvo finance would be more concerned with their $40,000 defaults,not a meesley $4,000 clunker that's in the shop more than it's on the road they must need lunch money or something! Had to vent ,sorry. I'll pull the loan agreement now and see what it says. Thanks!

Maybe your state is different, but typically co-signers need not be on the actual title. But, if your husband is on the title, you are probably screwed, because that makes the car (or at least your husbands interest in the car) part of the BK, and they have a right to repo as a result.