Reaffirm a car loan?

[ansky0007]

I have two cars... One I am giving back and the other I plan on keeping. The one I am giving back is $500 a month and is well out of warranty so its too risky to keep. The one I am keeping is $400 a month and has a 6 Year 100k mile warranty so I want to keep it since its a nice car and I have no fear of anything besides basic maintenance since it has a factory extended warranty.

Now, My lawyer is telling me NOT to sign a reaffirmation agreement on the one I want to keep but I want to so I am confused.

From my conversations with GMAC they said if we signed the agreement and once we are discharged they will continue to report to the credit agencies so it will also help build our credit back. We only owe $13k on the vehicle which was once a $60k vehicle so we do not want to loose this vehicle.

On the other hand Lawyer is trying to still persuade us to not sign it. Is it more work for them if we do? I am just trying to understand why he would not want us to sign it?

[RedLight]

No, your atty is not lazy or trying to get out of work. In the end, he is trying to protect you. When you reaffrim a debt, the debt does not get discharged. So, in the future, if you ran into financial trouble, you cannot simply walk away from the car without financial liability. On the other hand, I think the trustee has to approve the reaffirmation. Also, it would be good to have it reporting on your credit report. I am also not too familiar with the GMAC financing, but I am pretty sure they would come pick up the car if you do not reaffirm, I don't think they will let you do a ride through. Anyone else can chime in on this that has more experience with GMAC.

[mrbsf]

If you are on time and current with your payments to GMAC, then the only advantage to signing a reaffirmation agreement is to have your payments, after discharge, reported to the credit bureaus. My advice would be to NOT sign a reaffirmation agreement. There are other ways to start rebuilding your credit. If you are current with your GMAC loan, even without a reaffirmation agreement, they can not repo your car. This is based on consumer laws outside of federal bankruptcy laws. Take a deep breath, keep making payments and do not reaffirm.