Should I Reaffirm My Car: Ohio Chapt. 7

[DariasTwin]

Hello All,

I will keep this succinct. Any more info that you need let me know. Filing chapter 7 in Ohio (well under the requirements), pro se. 9k of consumer debt, 80k in private student loans (no govt backing) that I actually plan to file an adversary against (I know I know, but in my opinion nothing beats a failure but a try). Anyways 9k may not be a lot but hell I am drowning. Even moved into a low income community with my kids to stay afloat and I still can't.

So my question. I just got a new, used car in March. I'm current on my payments. They are very reasonable at 164 a month. The warranty is going out next March and I'd like to trade it in to another vehicle that's under warranty, that's used. I am scared to death of car repairs 1. I can't afford them, 2. They're partly the reason I'm in the situation I'm in now from previous cars.

So knowing this information, should I reaffirm my car? I'm nervous about not reaffirming because 1. I'm afraid that I will not get to trade next year at this time because of my bk and 2. No one will match the current interest rate of 7.9% that I'm at now which is excellent for my credit. Any thoughts? Meeting with lawyers for free consults to see their thoughts but would like yours too.

[bcohen]

Your post raises two separate issues, which I will address together:
1. Should you stay on the car payment "treadmill" and trade in your used car for a different used car (with a new loan) once the 1-year warranty ends?
2. Should you reaffirm your present car loan?

The answer to both of these questions is not just "no" but "hell no". Unless your present car is a lemon (in which case you'd have to be downright insane to consider reaffirming the loan), there is no reason to believe that it is going to start breaking down after the warranty ends. Most properly-maintained cars will last for 15 to 20 years with minimal additional repairs. Also, there is no reason to believe that a different used car, which you are considering buying in the future would somehow be more reliable than the one you already own and are driving.

Also, reaffirming your car loan DOES NOT provide any advantage with regard to paying off the loan or trading in the vehicle before the loan is paid off. All it does is guarantee that if for some reason you cannot honor the terms of the loan then you will be sued.

[DariasTwin]

Wow, okay. Solid advice. Thank you for replying.