reaffirm or not? Any info?
I am new to this forum and would like any advice anyone can give. I am in the process of bk and am trying to decide on whether or not to reaffirm my car. My payments are 362 and still have a couple of years on my loan. Will reaffirm my car help my credit after bk ? (I do have some late payments)- I have only had the loan over a year. Or should I let it go and get another car after discharge? Which one would look better or help my credit after bk? Please help anyone!
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First, can you afford the payment for the foreseeable future?
The skinny on reaffirmations is this.
1. You do not need to reaffirm, if you continue to make the payments, the finance company cannot repo your car. And if in the future, you can no longer afford the payment, you can allow them to repo the car and they cannot come after you for a deficiency balance (because it was discharged in your bankruptcy). However, because you did not reaffirm, the finance company can report on your credit report that the debt was "included in bankruptcy" which is not an ideal credit report entry.
2. If you reaffirm you are agreeing to continue to be liable for the debt after bankruptcy. Thus, if in the future, you default on payments, the finance company can repo the car and hold you liable for a deficiency balance. However, if you reaffirm and stay current on payments, the finance company should report your debts as "paid" or
"paid as agreed" on your credit report, which are good entries.
However, I do know of persons that are able to get their credit reports to reflect as "paid as agreed" on non-reaffirmed car loans by continually disputing the credit report entry.
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