ride through with Honda?

[jribe]

Hello Everyone,

I was planning on reaffirming my car with Honda as i assumed they wouldn't do a ride through.

I called Honda today, and of course the BK department was already closed. They apparently mailed a reaffirmation agreement in late october- to an old address. So i said i wanted to keep the car, and please send new papers.
The lady told me "you know you don't have to reaffirm to keep the car right"?

Now- i know this isn't the actual BK department saying this- but if someone at Honda is saying they basically won't repo if you're current - does that sound good?

Is there any benefit to reaffirming versus a ride through?

[Meatstick]

I would be real interested myself on how Honda "officially" handles this situation. I am not sure but I think if your current the ride-thru may fly. If your behind and don't re-affirm they may repo as soon as the case is discharged.

We are filing a Ch.7 in Feb/Mar 2010 and have a auto loan with Honda that will only have about 25 payments left. We are almost at the point of having some equity built up so not sure if we will re-affirm or just try the ride-thru.

Maybe you can get Honda to put that in writing ?

Good luck.


Meatstick

[jribe]

precedent

this precedent makes me concerned... Anyone do a ride through in CA? (not with Honda?)


"Ride Through" Option Did Not Survive BAPCA
In Dumont v. Ford Motor Credit Company (In re Dumont), C.D.O.S. 11793, 08-60002 (9th Cir. September 15, 2009), the Ninth Circuit held that the "Ride Through" option, which allowed debtors to retain collateral and continue to make payments, did not survive the Bankruptcy Abuse and Prevention Act of 2005 ("BAPCPA").

In 2003, Antoinette Dumont purchased a car from Ford Motor Credit Company. The loan documents contained an "ipso facto" clause, which provided that the loan would be in default if Dumont filed bankruptcy. In 2006, Dumont filed a voluntary chapter 7 petition, and she listed the car as an asset with a value of $5,800. At the time, Dumont owed $8,288 for the car, and she was making payments of $335.78 per month. Dumont filed a Statement of Intention with the bankruptcy court, stating that she would retain the car and continue making payments (Bankruptcy Section 521(a)(2)(A) requires a debtor to file a Statement of Intention with respect to collateral). A discharge was entered in Dumont's case, and three months later Ford repossessed the car even though the payments were current.

Under Ninth Circuit law, a debtor was entitled to retain collateral and continue making payments. See McClellan Fed. Credit Union v. Parker (In re Parker), 139 F.3d 668, 673 (9th Cir. 1998). A creditor holding a lien against the collateral was barred from taking possession of the collateral. Dumont successfully moved to reopen her bankruptcy case and alleged that Ford violated the discharge injunction. The bankruptcy court disagreed, and the Bankruptcy Appellate Panel ("BAP") affirmed.

The Ninth Circuit ruled that BAPCPA added a requirement to Bankruptcy Code Section 362(a)(1)(A), requiring debtors to elect one of three options with respect to collateral: redeem (essentially, to "buy back" the property); reaffirmation (to reaffirm the debt with approval from the bankruptcy court); or assumption (to assume the debt). Because Dumont did not elect one of these options in her Statement of Intention, Ford's rights under the loan agreement were revived, including the "ipso facto" clause, and Dumont was in default of the loan.

Judge Graber entered a strong dissent. Noting that BAPCPA has been criticized for its lack of clarity, Judge Graber explained that the text of Bakruptcy Code Section 521(2), which BAPCPA redesignated as 521(a)(2), was left unchanged. Furthermore, Congress made no comment to suggest that it intended to impose a new requirement under Bankruptcy Code Section 362(h)(1)(A) despite the vigorous public debate surrounding the "ride through" issue. In other words, Judge Graber argued that BAPCPA perpetuated the status quo, and he concluded that he would not have overrulled Parker.

[liz417]

Hi all,

Yes, I am in CA and I am doing a "ride-through" with Honda Finance. No problem. My attorney told me that BOTH Ford and GM tend to repossess vehicles EVEN if the debt is current, so be prepared. Now I have a Honda (purchased a year ago) and a Hyundai (purchased 2 years ago) that are both current and I did not reaffirm. I didn't want to reaffirm the Honda because we are so upside down AND just in case something happened that we couldn't afford to keep it anymore. I do plan on "letting it go" sometime down the road. As for our Hyundai, there is no equity (or barely any) and the payments are very reasonable and I have like a 1% interest rate...I'll be keeping that one.

[Meatstick]

Can anyone clarify that as long as you stay current you are safe doing a ride-thru ? Just seems as though the finance company might be able to take posession of the vehicle regardless if the account is current or not. Would suck if someone didnt re-affirm, kept the payments current and had the vehicle taken back once it had equity or was near pay-off.


Meatstick

[DebtEnder]

I have heard on these forums, and in the past day even, that Ford WILL come after your car even if you are current. Chrysler as well. I have heard GM but never seen anyone post as such as it occurring to them directly. I had a loan thru GMAC with about 5 payments left after I was discharged, never reaffirmed and finished paying it off early a few months ago. I have the title now. Never heard a pep from them except a thru my lawyer when I got 2 months behind on the payment when not yet discharged. They didn't even charge a late fee.

[logansdad]

The big 3 are in the "car" business they have vehicles cross their lots daily they are used to dealing in cars. Banks are not I have a very conservative big-10 CU i called them today and laid it out. She said we don't want your car any more than you want to give it up, she said that as long as payments are on time there would be no problem. If I am a day late they would start the process to repo. My attorney told me Monday night that all must reaffirm to keep the car, I didn't buy it since he is also the counsel for the bank my wife's car is financed through and he wants to protect that bank by telling us we MUST reaffirm. I think the finance units see it this way, they feel they got a 1/3rd chance of not getting the car back. 1/3 people reaffirm, 1/3 surrender, 1/3 ride and pay and eventually toss it back when they are bored with it, find something better (cheaper) or get sick of paying on it. So they know if a reaffirm is not signed they have 2/3rds of a chance they will be getting the car back and since the customer is paying they will keep taking the payments. Ford Credit has allays been a strong arm financier this doesn't surprise me at all. For small independents and such ride and pays will probably survive.

[justbroke]

Can anyone clarify that as long as you stay current you are safe doing a ride-thru ?

No, you are not safe. I think that the Bankruptcy Code is pretty clear, that you must Reaffirm, Surrender or Redeem personal property. However, some Districts allow a ride-through on personal property (like a car) if you're current and continue to pay. Much of the reasoning has really been found in underlying State non-bankruptcy law, with much argument on whether filing Bankruptcy is material or constructive default, for purposes of your Agreement.

Now there's some argument over whether the Reaffirm, Redeem or Surrender applies to real property, because the 2005 (BAPCPA) code only refers to personal property. (Specifically in 11 USC 521 where it only talks about "retaining" personal property.)

[jribe]

okay, so i talked to the Honda Financial Bankruptcy department. They said they will not reposses a car if it is current. I asked if there was something they could send in writing and the guy said no. He just said it is Honda's policy not to repo unless the loan is more than 30 days past due. He said he is aware that Ford will Repo regardless.

At first, i was worried about why they wouldn't put it in writing. Then i realized, because the new bankruptcy code doesn't specifically say anything about a "ride through" being allowed- they can't write it as a policy. So it's just their internal company procedure to repo if it's past due. Make sense...

The important thing to point out with the Ford case i posted- was that apparently in the loan contract it stated the the bankrputcy filing constituted "defualt".

I think i'm going to take my chances and just keep paying and not reaffirm. I'm not sure that the judge would approve the reaffirmation anyway.

[Meatstick]

Thanks for the info jribe and good luck !


Meatstick

[ItsJustMe]

Our attorney told us we should be fine (Chase), but did ask if we were financed through Ford and said that people are having issues w/Ford repoing on current loans.

[Lana]

I just filed and my attorney told me specifically that I should reaffirm the car ( a 2004 civic with a 4k loan and 160k miles) or they may come for it even if I'm current.
I actually thought it was ridiculous - the car has 160k miles! its not worth anywhere near the 4k I owe, and I'm current - why would they bother???
But whatever- I'll reaffirm.
The car isnt really worth much, but god knows I'll get no other car loan, and I love my little Honda civic! Greatest (ahem...most cost efficent, dependable..not quite luxurious) ride in the world.

[ItsJustMe]

Does anyone know, if you reaffirm do the post-reaffirmed payments get reported on your credit report?

[StartingOver08]

Does anyone know, if you reaffirm do the post-reaffirmed payments get reported on your credit report?

I don't know if it is lender specific. I had a car I reaffirmed in my BK with a CU and they reported each and every payment. BTW, I just paid it off this month and expect them to send the title soon. The CU was very good about reporting the reaffirmed vehicle payment.

[ItsJustMe]

I don't know if it is lender specific. I had a car I reaffirmed in my BK with a CU and they reported each and every payment. BTW, I just paid it off this month and expect them to send the title soon. The CU was very good about reporting the reaffirmed vehicle payment.

Congratulations on paying it off! And thank for the answer We have on vehicle that we planned to pay off ASAP, but if we can get some good credit reportings out of it, maybe we'll put the money in the bank and pay it off over a couple of months