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Need to decide: Vehicles

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  • Need to decide: Vehicles

    Please help me decide what we should do re: our vehicles. Our 341 meeting is 8/23 and the attorney said they usually bring the reaffirmation agreements to be signed at the courthouse.

    Both of these loans are with a very small credit union, very close to our house. Interest rates are great at 2.5% and 2.8% -- but each of these loans has about another 5 years left to pay on them.

    IF my husband were feeling healthy & strong, and was back to work, or close to it -- I think we'd just sign the reaffirmation agreements and be done with it. No worries about them coming and getting them someday when we aren't prepared for it.

    BUT ~ he's not doing great. This is about 8 weeks out from back surgery. For the past 2.5 weeks, he's had a headache. They've done a blood patch in case of spinal fluid leak. That should have done its thing by now -- but he's still not great. I also wouldn't call this surgery a success. The symptoms he had which led us to surgery in the first place are NOT gone. He's also occasionally having cold sweats when he's up and around "too much" (which is not much at all). I have no idea what we are getting into with him...... no idea when he's going back to work. Could be a couple of weeks. Could be never.

    He does have good disability insurance we're getting right now, and also the option of a decent occupational disability payment for life, if he is no longer able to be employed at his regular job. So the concern is not necessarily for the immediate future with these payments -- it's the idea of committing to them for another 5 years. I have no clue where he'll even be health-wise five days from now. I mean, crap ~ five minutes from now.

    So my question: Today our credit scores are 685 and 702. I assume this is because everything has been zeroed out from us filing. Do we have a special, magical window here where it is the best time to get different vehicle loans, if we're going to? When will our credit scores just absolutely tank? Is it after discharge?

    We're strongly considering not signing the agreements because things are just so shaky and uncertain with him. If the credit union insists on taking these vehicles and losing money on both of them *despite the fact that we have NEVER been late, and in fact have been early lately* -- then I guess my opinion is: Just freakin take them. We could rent a tiny car for a week at a time, until we figure things out. But after seeing our scores on creditwise today, I'm just wondering -- should we be vehicle shopping now? Is it going to be SO much worse to get a loan at some future point in time?

  • #2
    More thoughts:

    We probably won't be discharged until October, right? Do you have up until discharge to decide about these agreements? And they can't come and take them until after discharge, right? ...Maybe we'll have a lot better idea of what's going on and what's the right thing to do by then.

    Comment


    • #3
      I got a new car loan during my case but the interest rate was pretty high. You may well end up with a payment for one car that nearly equals your current payment on 2.

      I forget what the timeframe is as far as carrying out your stated intention (reaffirm, surrender, etc) but the credit union does NOT have to wait until discharge to repo. They could file a motion for relief from the stay anytime after the 341.

      However, you still have a way out: you could sign the reaffirmations, but don't have your lawyer sign off on them. You'd then have to have a judge approve them. If the judge does not approve (and given your situation I think it's likely he/she would see reaffirmation as a burden) then it works just like a ride and pay: as long as you're current, the CU can't repo, and if the worst happens and you have to give the car(s) back later, it works as if you surrendered them during the case, even if the repo is years down the road.
      This post does not constitute legal advice. If you use this advice instead of that of a lawyer, God help you.
      Filed CH 7: 5/11/17 341: 6/12/17 Discharge: 8/14/17

      Comment


      • #4
        Of course, before you go through all that you should check with your attorney and the CU and see if a ride-and-pay is possible without jumping through the reaffirmation hearing hoop. In some districts, it's expressly allowed, in other districts, it goes through with kind of a wink and a nod (you state an intention to reaffirm but don't sign the papers, and just stay current on payments) and in a couple districts it's not an option unless the judge denies the reaffirmation as I stated above.

        I would be SUPER hesitant to sign a reaffirmation in your situation. (Well, in any situation, really, but especially yours.) A ride and pay (or a retain and pay, or a drive-through...whatever they call it in your district) would be a far better option if it's at all possible, because if the worst DOES happen somewhere down the line, there's no further damage to your credit and you're not on the hook for a deficiency balance. For example, under a reaffirmation, if you owe 10k, and they repo the car and sell it for 5k, you'd be on the hook for another 5k...and since you reaffirmed, they'd have all the legal options to collect: lawsuit, garnishment, levy, etc. Whereas, with a retain-and-pay, if something goes wrong down the line, they get the car and that's it. The underlying debt and any deficiency were knocked out by the discharge. They can't pursue you for another dime.
        This post does not constitute legal advice. If you use this advice instead of that of a lawyer, God help you.
        Filed CH 7: 5/11/17 341: 6/12/17 Discharge: 8/14/17

        Comment


        • #5
          rj ~ thanks for your thoughts. These are all things we are considering. One thing I hadn't thought about was that they MIGHT file a relief from stay, even though we're current. Man, that would be a crappy thing to do..... but I guess that would mean that they really, really want these vehicles back!

          Our attorney was very much like... if you want to keep your vehicles, just sign the reaffirmation agreements. Because it's a CU -- not because it's necessarily required here. Because they could literally just come and get them at any point in time, if they wanted to. (And we do live less than a mile from this credit union.) That was her point. She's not thinking about our future finances or really seeing what we see... certainly not having to live in our shoes. I said something about maybe a judge not agreeing to them (because I was thinking about pro se) and she said there will be no judge -- I will sign them. If you want to keep your vehicles, I'll sign them {shrug} -- just very laid-back about all of this. Possibly too laid-back.

          Comment


          • #6
            Yeah if she signs them then there will be no judge. What you want is for your attorney NOT to sign them, and then the judge to deny them.

            As for lifting the stay, it's very unlikely they'd do that if you're current. I was thinking more along the lines of if you didn't pay while deciding what to do.

            I would explain to the attorney, rather forcefully, that you feel a reaffirmation would be a burden (because of the issues you mentioned), and that you'd prefer to do a retain and pay if at all possible.

            One other question, how upside-down are you on these cars? I wonder if perhaps a 722 redemption loan might be an option. The interest rate would be higher, but the loan amount would only be the present value of the cars.
            This post does not constitute legal advice. If you use this advice instead of that of a lawyer, God help you.
            Filed CH 7: 5/11/17 341: 6/12/17 Discharge: 8/14/17

            Comment


            • #7
              Have you tried asking the credit union whether they will repo if you keep the loans current but do not reaffirm?
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

              Comment


              • #8
                Lady ~ I thought we should have just talked to them about this awhile ago. I think the general consensus here was that they could say one thing and do another, so there was no point. I also asked (and asked) another attorney whether we/he should discuss this with them ahead of time ~ and he refused to respond to those particular emails. That's ultimately why we didn't choose him... he just left us hanging on this (pretty important) credit union question, after big talk about figuring this out for us.

                rj ~ I'm not sure "how" upside-down we are on these vehicles. I just know they will lose money. Every time we've looked it up on KBB, the values sort of surprise us -- and I'm not sure where our attorney came up with the numbers for our petition... but she came up with ~$6,000 less value on each.

                It has always made sense to me to just call and talk to them. I think if he explained what is going on with his health and our reasons for not wanting to reaffirm -- maybe they'd be more forgiving, more willing to work with us. Maybe that's just wishful thinking -- maybe it isn't. The crapper is that these loans are both in his name only, so they probably won't discuss anything with me. They wouldn't even give me a receipt with a loan balance on it when I went and made the payments a few months ago. So if a call is to be made -- it's going to have to be him, and he just hasn't felt good at all. I guess I'll see how he's doing today, and go from there.

                Comment


                • #9
                  I just sent a lengthy email to our attorney, explaining the situation and asking her to advise how we should proceed. rj ~ I did present the option of her not signing the agreements, so it can go before a judge. Lady ~ I also presented the option of him calling and talking to the credit union to see if this is even going to be a real issue.

                  I'll update later when she responds. Thanks to all for your thoughts.

                  Comment


                  • #10
                    The credit union COULD say one thing and do another, but from a practical perspective it's easier for them to sit there and collect money from you, as opposed to finding the cars, repossessing them, cleaning them up, and selling them. This is why most creditors are okay with doing a retain-and-pay: it's easiest for all involved
                    This post does not constitute legal advice. If you use this advice instead of that of a lawyer, God help you.
                    Filed CH 7: 5/11/17 341: 6/12/17 Discharge: 8/14/17

                    Comment


                    • #11
                      My husband just called to talk to the credit union, and they were in a total panic because they have NO RECORD of us filing (on 7/6, mind you). They knew *nothing* about it. How does this happen? EVERY other creditor has zeroed out our balances, with the exception of the house & the cars, which made sense to me, because we said we were going to reaffirm those things. Even our travel trailer -- which is with another local bank -- has been zeroed out, because we said we were going to surrender.

                      So the office manager was in a big hurry to get off the phone with him, wouldn't talk to him any further about his situation, all she said was, "if you file bankruptcy on us, we're required to get something in writing". Basically saying he had to sign -- BUT -- she was so flustered by the whole thing, she just hung up with no real discussion.

                      I emailed the attorney and told her, and said "now what?" o_o

                      Comment


                      • #12
                        Except credit unions are a snarly bunch when it comes to debt. (I'm a member of 3 credit unions. They are member-owned and tend to be more spiteful.) The bankruptcy forms even understand this issue and they specifically -- on the reaffirmation paperwork -- ask if the creditor is a credit union. This is because the "undue burden" factor "does not apply to reaffirmation agreements when the creditor is a credit union."

                        However, some Judges have ruled credit union reaffirmation to be something "other than" an undue burden. In re Rios, 2007 Bankr. LEXIS 2847 (Bankr. W.D. Tex. Aug. 20, 2007) (nonrecourse home equity loan reaffirmation was disapproved)


                        Originally posted by Chrysalis View Post
                        My husband just called to talk to the credit union, and they were in a total panic because they have NO RECORD of us filing (on 7/6, mind you). They knew *nothing* about it. How does this happen?
                        .
                        .
                        .
                        I emailed the attorney and told her, and said "now what?" o_o
                        One department not knowing what the other is doing, or if there was notification is difficult to gauge, ESPECIALLY with credit unions. Some banks are super-efficient, have entire departments filled with tens of people dedicated to bankruptcy and others lack such organization. If you put them on the petition and they were on the mailing matrix, then they were notified at their regular place of business. Whether they lost the notice, didn't open the envelope, or don't communicate internally is nothing you should be worried about.

                        I would also caution that you should not be speaking directly with creditors. You are represented. Most creditors would politely hang up on you because a.) you are represented, and b.) they can get in trouble with discussing your account while inadvertently "attempting" to collect debt which would be a violation of the automatic stay.

                        Now what? Nothing. It's up to the Credit Union, now that they have "constructive" notice, to find out what they did to miss this. Please do not call this Credit Union or any creditor. You are represented. They will not want to talk with you given an active bankruptcy anyhow.
                        Last edited by justbroke; 08-16-2017, 01:01 PM.
                        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                        Status: (Auto) Discharged and Closed! 5/10
                        Visit My BKForum Blog: justbroke's Blog


                        I am not an attorney. Any advice provided is not legal advice.

                        Comment


                        • #13
                          jb ~ we did get a response from our attorney today, and she advised him to call the credit union and ask them about this. It's really the only way to (possibly) know if they are willing to let him retain and pay.

                          As I've said before, this place is super tiny. There are no "departments". There are maybe 3-4 women in there at any given time -- and yes, it's just the one branch.

                          They, in fact, DO know about our bankruptcy -- because the attorney has now emailed me a copy of the reaffirmation agreements sent to her on 7/27.

                          It seems the only way to get a clear answer about this would be to email our loan officer -- since she is the one who emailed the agreements, and according to our attorney, "the other people don't seem to know what is going on". Again, she advised us to talk to this particular person.

                          This is all so frustrating... We have now been every which way & circled back around to just signing the damn agreements. Although ~ I've now found a huge error on one of them, so -- good thing it worked out this way. Otherwise, if she'd just brought them to the courthouse as planned, I probably wouldn't have caught it.

                          Comment


                          • #14
                            Originally posted by Chrysalis View Post
                            jb ~ we did get a response from our attorney today, and she advised him to call the credit union and ask them about this. It's really the only way to (possibly) know if they are willing to let him retain and pay.

                            As I've said before, this place is super tiny. There are no "departments". There are maybe 3-4 women in there at any given time -- and yes, it's just the one branch.

                            They, in fact, DO know about our bankruptcy -- because the attorney has now emailed me a copy of the reaffirmation agreements sent to her on 7/27.
                            That is really small and your issues are reflective of what being tiny is all about.

                            Originally posted by Chrysalis View Post
                            It seems the only way to get a clear answer about this would be to email our loan officer -- since she is the one who emailed the agreements, and according to our attorney, "the other people don't seem to know what is going on". Again, she advised us to talk to this particular person.
                            I see the small bank issue now. This is something that you'll have to deal with, but if they don't care about reaffirmation versus a ride-through then I would not reaffirm.

                            Originally posted by Chrysalis View Post
                            jThis is all so frustrating... We have now been every which way & circled back around to just signing the damn agreements. Although ~ I've now found a huge error on one of them, so -- good thing it worked out this way. Otherwise, if she'd just brought them to the courthouse as planned, I probably wouldn't have caught it.
                            I can now see your frustration with the small bank. It's just one of those things.

                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog


                            I am not an attorney. Any advice provided is not legal advice.

                            Comment


                            • #15
                              The loan officer returned my husband's call this afternoon, but refused to answer the question: "If I am current on my payments, will you still come and get my vehicles?"

                              She said, "We're not allowed to talk to you about your debt. You have an attorney. Talk to her, and she can talk to us."

                              But when we've discussed this in the past, our attorney has already said that she won't negotiate with them. This is so frustrating. We're just looking for a solid answer -- one way or another.

                              Comment

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