How should reaffirmed debts be shown on credit report?

[jlouisville]

Hello –

My wife and I reaffirmed both car loans when we filed for Chapter 7 bankruptcy in 2004. We have continued paying on these accounts, and have never been late.

Our credit reports show these accounts as IIB. The payment history has not been updated, and there is no indication that the debt was reaffirmed or that we are still paying on the account.

My question is: How should these reaffirmed debts be reported on our credit reports? Can they be reported as IIB?

If not, what is the best way to get this changed? Is it better to go directly to the creditors, or should we dispute it through each credit agency?

Thanks for your assistance!

[poorme]

Hopefully, someone with your same experience can give you a good answer. Certainly, you asked for and filed the reaffirmation agreement - DID you receive a confirmation from the lender and the court? If not, the reaffirm may not have actually gone through and the car(s) are truly IIB. In that case, the reporting is correct.

[jlouisville]

Hopefully, someone with your same experience can give you a good answer. Certainly, you asked for and filed the reaffirmation agreement - DID you receive a confirmation from the lender and the court? If not, the reaffirm may not have actually gone through and the car(s) are truly IIB. In that case, the reporting is correct.

Thanks for your reply. We received and signed reaffirmation agreements from both lenders, and both were approved by the court. Both lenders are automatically debiting our payments from our bank account again, and we can also access our accounts online, neither of which would be possible if we hadn't reaffirmed the debts.

I'm certain that the reaffirmations are in place, I just don't know how this SHOULD be reported on a credit report. I have read a lot of conflicting information. Some people report that the IIB should not appear on your credit report for reaffirmed debts; other people say that the IIB is accurate. Right now I'm just trying to get a consensus among those who have had experience with it.

Thanks again for your response! I'm interested to hear other people's experiences with this.

[HHM]

I wish I could give you a good answer, I would side with those who say reporting it is IIB is NOT accurate. Since the debt has been reaffirmed and you are paying it according to its original terms, it should be reported as "paid as agreed".

Thus, if I were you, I would start disputing the credit entries.

There either has been or is presently ongoing litigation under FCRA (Fair Credit Reporting Act) on this issue...given the general standard used for accuracy, it must be the case that IIB is not accurate under your circumstances and its worth sorting it out.

[tinroofrusted]

I actually went through this with American General Finance.

I fought and fought with them for months before I finally found a man at their corporate office who finally took my side, totally agreed with the fact that I was still paying on time, and went ahead and made sure my credit reports were showing on time and accurate payments.

It took about 6 months to get it completely corrected, but they DID update my credit report!

[SinkingFast]

Another thought for you as a back up plan,............

Continue to be persistant as Tin suggested. Maybe you will get the Lenders to change and report to the CRA's correctly.

As a CYA, request payment records from your Lenders as a back up. Get a printout showing your payment history since you bought the cars. Then again maybe every quarter, have the Lenders send you a payment history as long as the notes are showing as IIB on your Credit Reports.

With payment records from the Lenders, you have proof that you did indeed pay as agreed on those loans when applying for new Credit on down the road.

[CindyLou]

According to Ford Motor Credit and confirmed by an attorney I consulted for a "free consultation"; even if reaffirmed; they will still report IIB. I actually filed a reaffirmation agreement, but somehow it never got signed by FMC, so...it was best for me, because when I found that out recently, I got a new car with better interest and lower notes and gave that one back. I also found out from FMC.....whether or not you sign a reafirmation agreement they allow you keep the vehicle as long as your are current (which I was) This is in california and from what I understand laws differ on reaffirmation agreements from state to state.

[HHM]

Ok, since we are talking about the old law, here is how it used to work...

If you were filing Chapter 7 Bankruptcy, and you had a car loan for example, AND you were current on your payments, AND you wanted to keep the car, you had two options.

(1). List the creditor on your BK (because you have to list ALL creditors regardless of your intentions with the debt), but keep making your regular monthly payments.
This option has the following effect, (a) the creditor could not take your car, (b) if you did eventually default on the car payments after your BK, you were NOT liable for any deficiency balance (i.e. when you owe more on the car than what it is worth). You essentially discharged the deficiency balance in your BK. So, if you defaulted after BK, the finance company would simply REPO the car and that would be the end of it.
Under option 1, I think the creditor could fairly report the debt as IIB.

The other option:
(2). List the Creditor on you BK (again, because you have to), but enter into a Reaffirmation Agreement with the creditor, said agreement being approved by the court, and you keep making your normal monthly payments.
This option had the following effect. (a) the creditor cannot take your car, (b) however, if you defaulted on the loan after your BK, you would be liable for the entire balance of what you OWE on the car. So, if the finance company REPO'd your car, they can come back at you for the difference between what they were able to sell the car for and what you owe.

You ask, whey would anyone take option 2...Reaffirmation Agreements are subject to negotiation, any attorney worth 2 cents, would attempt to get the car finance company to reduce the payments and amount owed. AND, most car finance companies would agree to report the debt in a favorable way on your credit report (i.e. Paid As Agreed).

In your case, I personally think FMC acted in bad faith by not signing and filing the Reaffirmation Agreement, you may want to check with PACER and see if the Reaffirmation Agreement was ever filed with the court and approved, if so, it won't mater that FMC never signed it.

Honestly, I think you have a fairly decent consumer type claim against FMC. Also, under basic contract law, if they were the ones that Offered the Reaffirmation Agreement, and you signed it, it may not matter that they didn't sign it.

[CindyLou]

well put together; exactly what i was trying to say but in a more readable format... for me, all is well that ends well. The reaffirmation agreement was not approved by the court because it was not signed. Worked out for the best because i was able to get out of the car without owing the deficiency.