Reaffirmation of an auto loan

[Michellemg]

I am now becoming concerned because I have read that there are cases where the judge refuses to let you reaffirm your car. My car payment is $944 per month and I am now making only about $2600. net monthly. Yes, I know that it is a large payment for my income but my life has changed drastically as of late. I was always told by people that I could reaffirm my auto loan but am now worried. I know that I can continue making my car payments and pay off the car. Can anyone give me additional info regarding this?

[dumpinmydebt]

I would HIGHLY doubt any Trustee would allow you to reaffirm that large of a car payment. It would also not be wise for you to reaffirm it. You will be putting yourself in a horrible position.

[Michellemg]

No, I wouldn't be in a horrible position because I am capable of paying it. Does anyone know the rules re this? If there is money left over after all expenses isn't it my choice if I want to keep it? If my car were taken I wouldn't have any transportation to work and I'm sure that a new car loan would be very expensive due to having no down payment and a much higher interest rate. Can a car be taken from you if you have never missed a payment and agree to continue making the payments?

[drowning123]

I guess you don't have much household expenses. That car payment is 36% of your net salary. That's high. Even so, it's the trustee's choice if you should keep the car. It's the lender's choice to allow you to do a ride through. I think you should work harder at a ride through than a re-affirmation.

[Michellemg]

What is a ride through?

[drowning123]

Ride through is if you keep making payments without re-affirming. Yes, a car can be taken away from you even if you continue making payments without a re-affirmation agreement, especially if it's a Toyota or a high-end car.

[Michellemg]

Thank you for you input. So is there no sure-fire way I can reset assured that my car won't be taken from me even if I've never missed a payment and I'd do anything to keep it, with the exception of not filing?

[drowning123]

Thank you for you input. So is there no sure-fire way I can reset assured that my car won't be taken from me even if I've never missed a payment and I'd do anything to keep it, with the exception of not filing?

Bingo! If your other expenses aren't that much, and your Disposable Monthly Income (DMI) isn't too low, you may have a sliver of a chance. The good thing is the DMI is based on your gross salary. Please come back and let us know how things work out.

[Michellemg]

How can they expect you to get to work if they make you give up a car you can pay for? I still don't understand how a car can be taken if you make the payments.

[IBroke]

Even so, it's the trustee's choice if you should keep the car.

I thought it would be the Judge's choice...

[Dee]

Ride through is if you keep making payments without re-affirming. Yes, a car can be taken away from you even if you continue making payments without a re-affirmation agreement, especially if it's a Toyota or a high-end car.

Does this apply even if the vehicle is exempt property under the state exemptions? Now I'm worried because I have a Toyota SUV with only a year of payments left on a 72-month loan. My payments are $783, but I've never been late. My intent is to just ride through and get it paid off next year(it is not financed through Toyota, thank goodness - I've heard they can be difficult to work with). I realize it's a high payment, but it wasn't when I bought it 5 years ago. The thought of a trustee taking a vehicle away from me that I have worked 5 hard years to pay for is making me panic!

[rjmwx81]

The problem is, even if the high payments don't create an undue burden for reaffirmation, you're still going to be claiming an expense on Schedule J that's nearly 2 times the amount allowed by the guidelines. That's going to attract the interest of the trustee and you could find yourself forced into Chapter 13.

[drowning123]

Trustee makes the suggestion. Judge is not at the 341 meeting.

[drowning123]

Yep, that's another way to look at it, rjmwx.

[drowning123]

How can they expect you to get to work if they make you give up a car you can pay for? I still don't understand how a car can be taken if you make the payments.

Michelle, I know how you feel, but the court really makes the decision, as cruel or unfair as it may be. We have to understand your whole picture I guess. We know you said you can pay for it, but in the trustee's eyes or the judge's eyes they may not see that you can pay for it. Like I said before, see what you can work out with the lender. Some lenders don't even want your money while you're in the middle of a bankruptcy because they're afraid of violating the automatic stay. This means that your payments fall behind (even though you have the money) so the lender ends up having every right to repossess the vehicle after you're discharged. If they're nice, they'll allow you to get caught up and continue paying. Good luck.