Why Reaffirm ?

[Beach Bum]

My lawyer has told me that there indeed HAS been cars repoed after non reaffirmation, but mostly Ford.
My lawyer refused to sign my reaffirm last week too due to negative $250. Only if we got a second income putting us well above the negatives would he sign. That could mean the dreaded 13 though, so no thanks....
Its terribly scary though, to pay while they can take it can take it any day. Like said, will we get ownership papers when payoff happens? Has anyone here?
My husband and I are going to try to look at it from a "We are renting and hopefully will own" point of view.
(If they came for this car we have car I think they would shreak anyhow. Its pretty trashed from two kids, a large dog and delivering newspapers before in wee hours while spilling coffee....)
WAM

I'm in the same conundrum. If we amend to show that we make an additional $300 a month our lawyer will sign the reaffirmation. But it's unclear if that will push us into a Ch. 13. I really don't know what to do because no one seems to have a clear cut answer to this question.

I always thought the means test was a snapshot of our finances the day we filed, but it seems that some Trustees are bending that vagueness to their benefit.

[no_it_all]

My lawyer has told me that there indeed HAS been cars repoed after non reaffirmation, but mostly Ford.

I am sure cars have been repo'd after non-reaffirmation, but only when the debtor was <not> current with payments. Attorneys have been know to s-t-r-e-a-t-c-h the truth when trying to make a point..Obviously, there is absolutely <no> logical reason for Ford Credit or anyone else to repo a car that the debtor is current on.

In a public bankruptcy forum (like all forums) individuals <hear> all kinds of things and often those <things> are urban legends or as in this case, not all the facts are illuminated. About a year ago a poster was ranting and raving about this very subject (repo'd because non-reaffirmation while current in payments) and it turns out (for those that stuck with the thread, like me) that yes, she was sending in payments BUT TO THE WRONG CREDITOR. That last little bit of info was missing until the end of the thread, which as you can imagine, was significant.

[no_it_all]

I always thought the means test was a snapshot of our finances the day we filed, but it seems that some Trustees are bending that vagueness to their benefit.

The means test is a reflection of your last six months finances, not a snapshot of them the day you file. In addition, the trustee, by law, has a fiduciary duty to make decisions based on significant changes in future income or expenses.

[no_it_all]

My lawyer refused to sign my reaffirm last week too due to negative $250. Only if we got a second income putting us well above the negatives would he sign. That could mean the dreaded 13 though, so no thanks....

I don't follow this. If you go to Walmart and get a part-time job to eliminate this negative balance, you will then be able to expense this car on the Means Test Calculation worksheet. Those transportation expenses should offset the increased income, leaving you pretty much back where you are now, except you will have your car.

I also assume you have been following this thread, and as posted, why don't you just <not> reaffirm, and keep the car? Make payments <on time> and ride off into the sunset....Believe me, nobody is going to repo it if you are current in your payments..

Now, if it were me, I would hand the car over in a heartbeat and get out from under the debt.

[HHM]

The problem with this particular subject is the fact that there is a level of uncertainty in the law...this subject generates two types of advice, legal advice and practical advice.

The legal advice is...you run the risk of a repo for failing to reaffirm becuase the letter of the BK law "requires" reaffirmation, redeemption or surrender. Thus, it is not clear the debtor has any leg to stand on to prevent a repo if the reason for the repo is failure to reaffim. Thus, you are at least taking some risk of losing your car, even if you are current on payments, if you fail to reaffirm.

The practical advice is...almost without exception, if a debtor is current on her payments when she files BK and continues to make her payments on time and in the full amount, her car has NOT been repo'd for failure to reaffirm.

A good attorney will give you both practical and legal advice, but will stress the legal side of it.

[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

[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.

[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

[familyof7]

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

[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...

[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.

[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.

[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.

[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]

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