Why Reaffirm ?

[whatamess]

Well, those of us on ride through will have to all post on what happenes. Kind of like an update on your ridethrough thread. Im sure each state will be different. each compnay as well. Im personally interested in Toyota, but it seems many here are with Ford too.
My payoff is due October '09. I was thinking of taking my tax return next year and plunking it down on the car, so I will payoff in less than one year. Depends on how long my case is dragged on. I figure 341 in August..closing & discharge hopefully well before the trustee starts eyeing up 07 tax returns. Cuz I need mine!!
WAM

[CPO]

I see what your saying...but since the lien and the rights associated with the lien survive BK; conversely, if the debtor satisfies the conditions to release the lien, the car finance company, I don't think, could refuse to release the lien.

But your right, there is a risk that you might have to take the company to court to release the lien, but IMHO, I think that particular risk is fairly small.

Agreed.

CPO

[HHM]

I see what your saying...but since the lien and the rights associated with the lien survive BK; conversely, if the debtor satisfies the conditions to release the lien, the car finance company, I don't think, could refuse to release the lien.

But your right, there is a risk that you might have to take the company to court to release the lien, but IMHO, I think that particular risk is fairly small.

[CPO]

I am not sure about that little issue. I think a creditor would have a hard time finding a legal standing to not issue title if there is no argument whatsoever that the creditor is owed any money.

I guess my point would be that there is no contractual obligation to release the title. Certainly your not protected by the BK court.

So, if they refuse to release the title, you would need to sue them in court...

...compared to receiving the title in the mail once you payed off your loan.

Not trying to argue either point. Just trying to state what I believe the result could be between the two choices...reaffirm or ride through.

CPO

[HHM]

So if we pay off a loan we did not reaffirm they dont have to give us the title?

I am not sure about that little issue. I think a creditor would have a hard time finding a legal standing to not issue title if there is no argument whatsoever that the creditor is owed any money.

[familyof7]

So if we pay off a loan we did not reaffirm they dont have to give us the title?

[CPO]

I am sorry, but I have no idea what you are trying to say...I <think> you are talking about a car loan. It is very simple. Make the payments on time and you get to keep the car. Don't make the payments on time and they will take it back. Assume for a moment that you do indeed reaffirm the loan. If you for any reason cannot make the payments, when they come and get it, you will be liable for any deficiencies. An example would be that you owe 10K on the car and they only sell it for 5k you WILL have to pay the 5K difference.

Assume the same thing happens only this time you DIDN'T reaffirm the loan. Guess what? The outcome is EXACTLY the same, that is, you have to pay the deficiency. THAT is why creditors don't really care if you reaffirm or not. The are going to get paid every dime regardless if you do or don't !!

The vast majority of posters haven't figured out that little nugget of information and argue about reaffirming when it is actually.....moot.

Reaffirm = all contract stipulations remain per pre BK for creditor and debtor.

Debtor is protected from repo by BK court (during BK proceedings) and thereafter unless debtor is in default. This is true even after the discharge takes place via the permanent stay.

If debtor defaults, vehicle can be repo'd and debtor can be sued for any deficiency balance after sale.

Credit reporting is resumed.

During the contract period and at the full term of the contract period, all terms and conditons must be met by debtor and creditor. Upon completion of payment period, title is transferred to new owner...the debtor, per contract.



Ride through = contract stipulations are moot...debtor is in default. Loan is discharged, security agreement remains in effect. Any claims debtor has via purchase contract are null and void. Creditor has full rights to vehicle unless protected by variable state consumer law.

Vehicle can be repo'd (not saying it will be) anytime as creditor still retains a security interest in the vehicle.

No credit reporting.

If vehicle is repossessed, creditor cannot sue debtor for deficiency after sale as debt has been discharged in BK court.

After payoff, since debtor remains in default, creditor is not compelled by law to issue title. BK court has no jurisdiction.

BK court does not protect debtors claims against creditor. Creditor is not bound by contract stipulations.

Assess your risks.

Take your pick.

CPO

[familyof7]

All debts that are not objected to and proven to be fraud with the exception of child support , student loans and some taxes are discharged when you get your discharge in a chapter 7.Including secured loans as long as they are not reaffirmed. The only difference in a unsecured loan and a secured loan in a chapter 7 bankruptcy is if you do not pay your secured creditor they get the secured property back so the debt is discharged but the lien is still valid. so a year after bk if you default you can give the property back and owe nothing because the debt was discharged you only elect to pay it to keep the property.

[familyof7]

If is is listed (which it is supposed to be) and not reaffirmed and no one objects then it will be discharged just like any other debt they can only object if fraud was commited. If it is discharged and you (at any time now or later) give it up or fall behind on pmts and it gets repoed then you are not liable for any balance owed it would be looked at as surrendered in bk. Only if it is found to be fraud or if you reaffirm would you be liable for any balance.

[phoenix44212]

?? If it was a car loan then it MUST be included in the bankruptcy creditors listing. If it was included in the bankruptcy and not reaffirmed then it will be considered a surrender, ie. if you turn it in (even at a later time) you are NOT liable for any deficiency.

[no_it_all]

Only if it was discharged in the BK...if it was NOT discharged then the debtor is liable for any deficiencies. I know, it sounds like it must then be reaffirmed..but it doesn't have to be! Remember, for a reaffirmation to be binding, the judge, debtor and creditor all agree and sign the document. Stating in your BK papers you <intend> to reaffirm is not sufficient...

[familyof7]

If you dont reaffirm and you dont pay you are NOT liable for any deficency

[no_it_all]

To follow up your other question (the one I could understand )...The creditor was sending her monthly payments to the original creditor when in fact the loan was <sold> to a collection agency and she should have been sending them there. Apparently the original creditor was attempting to apply the payments to the loan, but it was sort of a phantom loan since it was no longer in house and had been sold.

That was a very,very weird situation and I honestly don't believe the poster was completely aware what was happening. Make your payments on time and nobody will be coming for your car, whether you reaffirm or not....good luck

[no_it_all]

Ive decided that maybe it is better, as long as they dont take it when we still need it, that its maybe better this way like the lawyer said. This way, if something happens where we cant pay, we can get out and not be stuck.

I am sorry, but I have no idea what you are trying to say...I <think> you are talking about a car loan. It is very simple. Make the payments on time and you get to keep the car. Don't make the payments on time and they will take it back. Assume for a moment that you do indeed reaffirm the loan. If you for any reason cannot make the payments, when they come and get it, you will be liable for any deficiencies. An example would be that you owe 10K on the car and they only sell it for 5k you WILL have to pay the 5K difference.

Assume the same thing happens only this time you DIDN'T reaffirm the loan. Guess what? The outcome is EXACTLY the same, that is, you have to pay the deficiency. THAT is why creditors don't really care if you reaffirm or not. The are going to get paid every dime regardless if you do or don't !!

The vast majority of posters haven't figured out that little nugget of information and argue about reaffirming when it is actually.....moot.

[whatamess]

No it all, we are going to keep making the payments on time. We only have one car now as it is, our other died back a while ago.
Im going on 100% lawyers advice.
Ive decided that maybe it is better, as long as they dont take it when we still need it, that its maybe better this way like the lawyer said. This way, if something happens where we cant pay, we can get out and not be stuck.
BTW was this persons car on an old thread repoed because she mailed the payment to the wrong dept. in the car company (regular instead of BR dept) or she mailed them to another creditor entirely? (ODD?) I did a search here and found nothing but this sounds interesting.
WAM