reaffirmation question

[endisnear]

we have the funds to continue paying on a vehicle we just purchased in july. we traded in our other car in which we were upside down on, and tacked on the neg equity to the new purchase, but our payments are still lower than what we traded in...

my question is how do atty's and trustee look at reaffirmations on vehicles you are super upside down on. we really want to keep it.

[DisneyGirl]

When we were upside down on our van loan we did a redemption loan instead of reaffirming the original loan. The interest rate was horrible but it took off the negative equity that was added from a previous car and we only paid the blue book value of the van. Brought it down by about $10000. Plus the new loan counted towards rebuilding our credit score. I'm not sure if it will work for your situation but it's something to look into if you're interested.

[endisnear]

thanks disneygirl! i'm kinda new to all of this, could you explain what exactly a redemption loan is and how it works? we have a decent rate 8.2% on a 75 mo loan, but added 10k neg equity when we bought it, and i'm sure have lost even more value just owning it.

[GreenInkOnPaper]

A redemption is paying actual value for an item instead of what's owed on it. Suppose your car is worth $5k but you owe $7k. You can redeem the car for $5k, possibly financing with the current lender.

[cathywhite4495]

Hi,
You may also want to try neogtiating directly with the current lender. I was able to negotiate my reaffirmation and got a lower interest rate than my original loan. I owed what the car was worth so I didn't have to change that at all.

[endisnear]

Does the lender have to agree on the redemption amount? Is it something that they can accept or may decline to do? We are and will continue to be current on the loan if that makes any difference...

[StartingOver08]

I also was able to negotiate with my current lender on a reaffirmation - got my rate down to 5%, also lopped off about $4000 in principal balance - added a couple of months to the term and skipped a months payment. Also got the cross collateralization removed.

However on another reaffirmation I was not successful, have to give the car back. It depends upon the lender as to your results

[PoorAnnie]

When do you do this talking with the lender? Before or after you actually file with the court for bk?

[StartingOver08]

Actually I started working with the lenders after the filing. They sent reaffirmation agreements to my attorney. The attorney forwarded the agreements to me. I didn't like either agreement so I called the BK dept in each of the lenders to discuss the reaff.

For me, the CU was the most responsive. The other one essentially told me to pound sand, sign it the way it was or don't sign - they didn't care. The funny thing is, the one that is uncooperative is the loan for a 2006 high milage Cadillac! I find that funny now that GM may not make it to next year.