Is it okay to reaffirm a car note?

[kimw8083]

So is it ok to reaffirm on a car note?

[keepmine]

Personally, I'd not reaffirm unless your district absolutely requires it.

[Dorsey]

Even if your district doesn't require it it may not be worth it. My auto lender seemingly has a nationwide policy to accept ride-throughs if no reaffirmation agreement is signed. Given that case, why would a person ever reaffirm?!

[mwr]

The need for an auto-loan reaffirmation varies with the jurisdiction and the lender. Check with an experienced bankruptcy attorney in your area; he/she should know about both of those variables.

[debee]

Whether or not a debtor has to sign a reaffirmation on personal property depends on the lender.

If the lender wants a reaffirmation and the debtor doesn't sign one, the automatic stay lifts on the 45th day after the 341. The relevant sections are 11 USC 521(a)(b) and 362(h). In terms of personal property, it has been interpreted the same from one end of the country to the other.

Unless the lender is prevented from repo by state law, they are free to take the car at that time. Some states (like CT) do not allow repo if the debtor is current. However there have been cases in other parts of the country where the lenders bring debtor before a bankruptcy judge and compel the debtor to either reaffirm or "surrender" and in that way they get around the state law provisions.

Luckily most lenders don't require reaffirmations and will be content to accept payments and let business go on as usual.

Some people do prefer to reaffirm their cars. If they have ample equity, or are close to the end of the loan and the lender requires it, it can make sense.

[DAE]

debee, what purpose does Rule 4008 play in this deadline for filing the reaffirmation agreement? The agreement sent to me by my lender says the agreement should be filed with the Court "within the time set under Rule 4008." Rule 4008 says a "reaffirmation agreement shall be filed no later than 60 days after the first date set for the meeting of creditors..."

So, while the stay lifts on the 45th day per 521(a)(6)(a), what does the 60-days in Rule 4008 offer? Is the 15 day difference act as time allowed for you to file the agreement that should have been executed by the 45th day? It seems like the effective period of the stay is really 60 days for all intents and purposes since even an executed agreement that isn't filed and approved wouldn't be enforceable and the lender couldn't act upon a repossession during this 15 days because of the possibility the debtor would file the agreement.

[debee]

Is the 15 day difference act as time allowed for you to file the agreement that should have been executed by the 45th day? It seems like the effective period of the stay is really 60 days for all intents and purposes since even an executed agreement that isn't filed and approved wouldn't be enforceable.

Yes, that's my understanding. If you sign the agreement, you get the extra time.

I guess you could stretch it out even longer by signing, filing and then rescinding.

[keepsmiling]

I spoke to an attorney yesterday who is also a trustee. I was shocked when she said we had to reaffirm the car. Anyone else in NJ have this issue?

[debee]

You don't have to reaffirm.

You have three options on your Statement of Intentions: reaffirm, surrender, or redeem. You have to choose one on that form, but you don't have to sign a reaffirmation agreement. It is voluntary.

You could indicate that you intended to reaffirm, and then not enter into a reaffirmation agreement.

If your lender requires you to sign one in order to keep your car, then you have to sign it, redeem or surrender.

If your lender does not require it, you don't have to sign it. Not all lenders even bother sending a reaffirmation agreement.

You should get that lawyer to write that down, sign and date it. Then pm Des.

[keepsmiling]

Anyone know Bank of America's policy on ride-thru's?

[debee]

Fairly sure they're ride-thru friendly. Read here on the forum some time ago that they don't even bother sending reaffirmations. You could call them anonymously and ask for their bk department and ask them their policy. No need to pull up your file, etc.

[keepsmiling]

Thanks, that's what I thought and why I was surprised by that convo with the atty/tt. ....

[debee]

Maybe it was just a miscommunication. He might have meant to express that you have to choose one of the options since "ride-thru" is no longer a legal option like it used to be. It can still be done, just not like before BAPCPA.

[dman]

This is just general info:

Generally, you don't want to reaffirm. Ride-thru is what you want, even though it may not technically be an option.

Some companies require a reaffirmation, else they'll repo (I think Ford is like this). Ask your lawyer. A common plan of attack for companies like this would be for you to sign the reaffirmation paperwork (assuming, of course, you wish to keep the vehicle), and your lawyer would argue against it. Judge would probably deny it. So, you fulfilled your end of the bargain (you did reaffirm), but it's not binding (because the judge ruled against it). You "should" be ok in such a situation, but again, no guarantees.

And IF they did repo, all is not lost. If they sell it for more than you owed, they're required to pay that back to you. So if you only owed $3,000, and the car was sold for $4,500, you'd be getting back $1,500 (whether they could charge fees, i.e. repo and auction fees, I do not know).

[AngelinaCat]

If you reaffirm the loan, you are then responsible for any difference between what you own on the loan, and what the vehicle sells for at auction should you have to surrender it.

If you do NOT reaffirm the loan, then you are NOT responsible for the difference between what you own on the loan, and what it sells for at auction.

In our case, we only had about 10-14 months yet to go on our loan, AND wished to remain with our CU, since 'Hub had been a member with them for 40+ years, so we reaffirmed.