Reaffirmation did not get filled before discharge

[CCope]

[Dollar Bill]

I'm not sure how you will find out. I am curious if you don't mind my asking....who is the creditor?

[HHM]

Frankly, most people don't do reaffirmations as there is little benefit.

Your personal liability to pay the debt IS discharged in your BK. However, the lender still has a lien on your car. So, yes, if you default, they have a right to repossess. But since you are so far upside down and since there was no filed reaffirmation agreement, you are NOT liable for the difference in the event you default on the car payments.

Also, even if you reaffirmed, that would not have changed how the car would have been reported on your credit report.

[PaKettle]

Sounds to me like you are LUCKY they want to repossess the car! Why pay a car each month that you are upside down on?

Check with your attorney but if it was indeed included in the Discharge and you definitely did NOT reaffirm (this is the important part, whether or not you reaffirmed, for sure), then if you didn't reaffirm, just go get another car and call them and tell them to come and get this one.

[CCope]

I know the reaffirmation did not get filled with the court - I spoke to the Court Clerk and was faxed the offical Docket Report in which their was no approval or filling of the reaffirmation. Even the creditor said our debt to them has been discharged. I would love to walk away from it since I am so upside down on this car but would hat to get sued a year down the road.

[HHM]

I know the reaffirmation did not get filled with the court - I spoke to the Court Clerk and was faxed the offical Docket Report in which their was no approval or filling of the reaffirmation. Even the creditor said our debt to them has been discharged. I would love to walk away from it since I am so upside down on this car but would hat to get sued a year down the road.

You won't get sued. Your debt is dischaged. If you want to get rid of the car, you have 2 options.

1. Stop making payments and simply wait for them to repo (this will give you about 3-5 months to continue to drive the car)

2. Depending on who the lender is, make arrangements to leave the car at a branch.

In any event, there is no LIST of discharged debts. If no reaffirmation agreement was filed, this debt is toast, you have NOTHING to worry about. See this thread that talks about discharged debts. http://www.bkforum.com/showthread.php?t=2128

[CCope]

HHH, Thanks for your replies and information. This whole process was a tuff one for us to go through. Our main goal is to get back on our feet and not worry about a law suit. Thanks again for you insight.

[lrprn]

Reaffirmation agreements are voluntary all around. Creditors are not required to sign reaffirmation agreements if they don't want to. You also do not have to sign one if your creditor demands it. That's how reaffirmation agreements work in bankruptcy.

Also, even if you reaffirmed, that would not have changed how the car would have been reported on your credit report.

Very true. And even if you reaffirmed, in most states the lender can still repossess any time a payment is even one day late. They don't do that normally because it's not in the lender's best interests to repossess a car unless the debtor is at least two months in arrears.

Under the circumstances, just make absolutely certain that your payments are made on time every month - no exceptions. I would make the payment through online banking if your bank or credit union has that service to ensure a third party can prove your payments were made on time in case there is ever a question about it.

And forget any grace period. Make the car payment well before the due date to ensure your lender has adequate time to post the payment to your account before the due date every month.

Hang in there. All your lender is asking is what all of us should be doing anyway - making loan payments on time by the due date.

[blaze]

Well here is a question along the same lines - I have read a lot of threads about this but still not sure what to do and DH and I are in disagreement - Should we reaffirm his car - We owe about 4K MORE than it's value due to high mileage. We are current - planned to reaffirm but from what I have read maybe we should not - if we keep paying on time we should not have it repo'd and then on down the road we could get a loan and just walk away from this one - We both don't like the idea of that morally and DH does not like that idea b/c of the stress that they MIGHT come repo right away if we don't reaffirm - he likes his car and it would be hard to get a loan right after our discharge. Also he thinks that if we reaffirm and keep paying this will help our credit - Is this true? I don't like reaffirming b/c if we get in an accident and total the care - we have no car - still will owe some on the loan after insurance pays the value of the car and have to go buy a new one. We told our attny we want to reaffirm - when do we actually file papers if we want to do this - We are reaffirming our mortgage but that is a different situation - we plan to live in this house forever and it will gain value over the years even though we have no equity now. Anyway - thoughts on the car would be appreciated!

[HHM]

If the car is in questionable condition, or has high miles, your ability to make the car payment is still tenuous after filing BK, or you are significantly upside down on the car, you should not reaffirm. Moreover, even if none of those things are true, there is generally no benefit to the debtor for reaffirming.

All reaffirming accomplishes is reinstate your personal liability for the debt that would otherwise be discharged in BK (note, the lien survives the BK).

The new BK law is now 2.5 years old, I have yet to hear of a case where a persons car was repo'd based solely on failing to reaffirm (so long as the debtor was current on payments and remained current).

[blaze]

what about our credit - if you reaffirms loans and continue to pay them on time does that help your credit score improve faster?

[lrprn]

We are current - planned to reaffirm but from what I have read maybe we should not - if we keep paying on time we should not have it repo'd and then on down the road we could get a loan and just walk away from this one -

This is the exact reason almost all lawyers will recommend that you do *not* reaffirm car loans that are significantly higher than the value of the car.

DH does not like that idea b/c of the stress that they MIGHT come repo right away if we don't reaffirm -

No matter which state you live in, a car cannot be repossessed as long as you are current on payments when you file and you continue to make your payments on time until the car is paid off. DH can cross this worry of his list.

You have to decide which risk is more likely - the risk that the car will have something catatrophic happen to it before you pay it off (best in that situation to *not* reaffirm) or the risk that you will be late with payments before you pay it off (then better to reaffirm). If you know now you are definitely going to have late payments, then filing bankruptcy may not resolve your financial problems anyway.

[lrprn]

what about our credit - if you reaffirms loans and continue to pay them on time does that help your credit score improve faster?

Reaffirming is no guarantee the lender will report on-time payments to the credit agencies. Reporting is voluntary. Some lenders still will not report even though you signed a reaffirmation agreement.

If you decide to reaffirm (and given that you are upside down $4K on the car I hope you don't), make certain that reporting to the credit agencies is written into the reaffirmation agreement.

[blaze]

thanks for the replies! i really don't think we should reaffirm this loan - But I am wondering - we are currrent on payments - last statement show no amt. past due - BUT - we have some late fees we just have not paid - they were there when we filed even though we were not late on the actual payments - I still don't think it will be an issue - the late pmt is only 150.00 - why in the world would they even want to come get a car that is worth less than the loan when we are making payments on time - I have no doubt we will stay current on payments - He is getting paid mileage and we use that for the loan payments, maintenance etc. I guess you can never see the future - job loss etc. so if we don't reaffirm then we'd just give the car back if he lost his job.

[Teddy]

Ok, my attorney said that I should keep my car (I'm probably 4-6k upside down). I like my car, it's a good vehicle and he said I should just keep it. He told me that would be a good payment to have when I figure out my expense list when I file, plus he said it would help build my credit.

Now reading here, that seems to be bad advice? I hope I don't have a bad attorney. I have it financed thru my local credit union and I'd feel worse not keeping that loan. I could always switch banks I suppose. If I were to do that, maybe I should switch banks now? I kind of hate to give up my car since I like it, but it's a 2002 and I still have 4 years on the loan @ 370/month - eek! I'm guessing you all are going to advise me to turn it in.

I also wonder how I would get a new car if I gave mine back?