Reaffirmation of an auto loan

[ccsjoe]

ccsjoe, I think he/she's in VA, not MN.

Duh, thanks...read wrong post.

[ladycee]

Hi Wguyen,

Sounds good. so far eh? I believe the law prevents them from sending you statements, because that is viewed as an attempt to collect a debt. They are not allowed to attempt to collect a debt because, officially, the car loan has been discharged thru bk and legally you can stop paying anytime you want and walk away from the car. Once you reaffirm it becomes like a new loan and at that time you ARE liable to pay the balance down, tho then you CAN received statements again, pay online and they report if you pay regularly to credit bureaus.

eg: my mtg servicer no longer sends statements either. They do send me "information" statements and they make sure to state "this is not an attempt to collect a debt" Toyota doesn't even do that. I can no longer pay either mtg or car pmts online. So I set up automatic payments to mtg, car + car insurance thru my c/a.

So what state are you in? and has your bk been discharged?

Does anyone know if they notify you before they repo? I mean they don't just sneak up on you do they?

thanks all,

Chris

thanks all

[Michellemg]

Wow are you serious? Your car payment is more than my mortgage payment. You should hope they take that car from you. Why the hell would you want to keep a car with a high payment? Whats the balance, interest rate, months left on term? You know that cars go way down in value right and you could use that money for a much better use. You're not rich and you should not have such a car. You can get a nice much cheaper car, that you won't be car poor. Thats whats wrong with society today everybody wants to act like they have money and buy an expensive car with high car payments and want people to be jealous of them and they don't make a lot of money and live in an apartment. Over half your income is going towards your car payment, gas, insurance. end rant/

Are you serious right now?? My car has nothing to do with making people jealous. When I bought the car I had a paid off multi-million dollar home. My situation has changed drastically...obviously. Your judgement is what's wrong with this forum. I sincerely appreciate the info I've gotten from the non judgemental, helpful people of this forum. You, however, should keep your opinion to yourself. That would be the only thing that I would thank you for. My interest rate is only 4%. My ex has sued me for support, my personal property, my retirement and always told me I would lose everything if I left him and my car is the one item that I have left. Also, try getting a mortgage ot even an apartment in Los Angeles for $944. per month. Watch your real estate agent laugh at you all the way to your car. And lastly my car is not an Escalade. It is a classic muscle car that means a lot to me. BTW, "It's better to remain quiet and be thought a fool than to open your mouth and remove all doubt."

[ccsjoe]

Does anyone know if they notify you before they repo? I mean they don't just sneak up on you do they?

thanks all,

Chris

thanks all

Hi Chris,

My only experience with repo, for what it's worth, was no notice, no heads up, middle of the night vanishing act. At least they were decent enough to empty the most obvious personal belongings from the car and leave them in the carport before disappearing.

[ladycee]

omg ccsjoe. That is really horrible! and don't they have to wait the 60 days to give you time to do the Reaffirmation? I was just told today by Toyota that I have 60 days from 341 Meeting to Reaffirm?

You and I are having 341 on the same day 10/6....how could they take the car so soon?

@Michelle....sorry you are having such bad luck. Look at it this way. Can't get any worse so it HAS to get better. Fingers crossed for you

Chris

[ccsjoe]

omg ccsjoe. That is really horrible! and don't they have to wait the 60 days to give you time to do the Reaffirmation? I was just told today by Toyota that I have 60 days from 341 Meeting to Reaffirm?

You and I are having 341 on the same day 10/6....how could they take the car so soon?

@Michelle....sorry you are having such bad luck. Look at it this way. Can't get any worse so it HAS to get better. Fingers crossed for you

Chris

OMG Chris, no. My experience with repo was pre-bk filing. During bk filing, they have to at least file a Motion for Relief from Stay in order to repo the car. You will know about this either thorugh your attorney if you have one or PACER. Once the relief is granted, though, they can just do a vanishing act unless you coordinate the surrender with them...and even then, some just tell you empty your car now because they can come at any time.

[gman]

OMG Chris, no. My experience with repo was pre-bk filing. During bk filing, they have to at least file a Motion for Relief from Stay in order to repo the car. You will know about this either thorugh your attorney if you have one or PACER. Once the relief is granted, though, they can just do a vanishing act unless you coordinate the surrender with them...and even then, some just tell you empty your car now because they can come at any time.

I'd encourage everyone to check their own BK district on what judges "allow."

In Georgia, one cannot tell the court you want to do a ride through/ride and pay. They simply do not allow it as an option. You choose either to reaffirm or retain (as in pay the whole thing off.) In addition, the exemption for equity (assuming you have equity) is $3,000.

At face value, I would have thought that I am screwed as I have less than $3k in equity and want to keep my car and continue to make payments.

However, I found out that "back door ride throughs" are common here in Georgia.

The key is YOU MUST ASK THE COURT AND THE CREDITOR TO REAFFIRM THE LOAN AND BE OK WHEN THE EITHER PARTY DENIES YOUR REQUEST. When they deny it, then you simply keep the car and make your payments. The other thing you must do is CONTACT YOUR LENDER AND FIND OUT WHAT THEIR POLICY IS FOR LOANS THAT ARE NOT REAFFIRMED.

My lender said as long as I make payments, no repo will happen.

My takeaway: Creditors need to check both within their BK district AND with their lender to see what is allowed. I know for certain that in Georgia, we are a "back door ride through" state. I am not aware of the laws and processes in the rest of the country - nor with other lenders other than Ford Credit (who will repo in a NY minute.)

Best of luck to all.

[gman]

I should add....if I found out I had (a) equity in my car and (b) the lender was not going to allow a ride through, I'd sell my car in a NY minute BEFORE I'd file.

I'd do the same thing if I had way more equity than my state exemption regardless of the willingness of my lender to do a drive through. I'd be too worried that the Trustee would want the cash in excess of the exemption and would FORCE A SALE ANYWAY.

There is no sense in watching money (equity) go down the drain while doing a Chapter 7.

[biotechsolution]

Did you read that statement of mine carefully or did it confuse you? I should've made it clearer like this:

If you bought your vehicle thru Ford credit then you have no choice but to reaffirm, otherwise they'll take your car. Repossessing your car is a stupid decision by Ford.

Not true. DId a ride through with Ford Credit no problem. 0% interest loan.

[LaurieM]

I posted this earlier on another thread relating to this whole issue of vehicles; the reaffirmation on the loans for them in a bankruptcy etc:

At almost $1,000 per month for a car payment, you'd have to be earning approximately $7200 per month in gross income to even make owning a car like that feasible based on the suggested budgeting percentage listed below (ppl would argue some of the percentages but the ones below are reasonable).

Getting a different vehicle, either prior to or after filing bankruptcy is not as difficult as one might imagine. People who do not know any better believe that you cannot get credit post-filing... not the case... actually you become a prime target for certain lenders post-filing because they can charge you exorbitant interest rates (because you've filed) and because they know there's no risk of you filing chapter 7 for another 8 years. You WILL pay a higher rate of interest (probably in the neighborhood of 25% interest) post-filing.

The idea someone else posed of stock piling some cash and buying a $3K vehicle is the best one I've seen thus far. That way you can save up for a down payment on a more reliable vehicle... the more downpayment you have, the better a rate you'll get because the loan to value ratio is more attractive to lenders. As an alternative, perhaps a family member has a 2nd vehicle, not being used which you could borrow while you find alternative transportation?

Housing (mortgage/rent, Real estate taxes) 24%
Utilities (water, power, garbage collection, 8%
Food 14%
Clothing 4%
Medical/Healthcare 6%
Donations/Gifts to Charity 4%
Savings and Insurance 9%
Entertainment and Recreation 5%
Transportation (car payments, gas, service) 14%
Personal/Debt Payments/Misc 12%

[wnguyen]

Hi Wguyen,

Sounds good. so far eh? I believe the law prevents them from sending you statements, because that is viewed as an attempt to collect a debt. They are not allowed to attempt to collect a debt because, officially, the car loan has been discharged thru bk and legally you can stop paying anytime you want and walk away from the car. Once you reaffirm it becomes like a new loan and at that time you ARE liable to pay the balance down, tho then you CAN received statements again, pay online and they report if you pay regularly to credit bureaus.

eg: my mtg servicer no longer sends statements either. They do send me "information" statements and they make sure to state "this is not an attempt to collect a debt" Toyota doesn't even do that. I can no longer pay either mtg or car pmts online. So I set up automatic payments to mtg, car + car insurance thru my c/a.

So what state are you in? and has your bk been discharged?

Does anyone know if they notify you before they repo? I mean they don't just sneak up on you do they?

thanks all,

Chris

thanks all

Hi Chris

This forum seems to move pretty faster than previously.

I'm in MN and I still have 2 weeks until the last day for creditors ti file any objection.

About repo, I don't know. I heard some give notice, some don't, depends on where you live. About the car, did your attorney ask you to reaffirm? Mine said no.

[wnguyen]

Not true. DId a ride through with Ford Credit no problem. 0% interest loan.

Then good for you. To you, it's not true but to some, especially to my friend whom I know, then it was true 2 years ago. I don't know if they have changed anything on their policy since then.

[tcreegan]

Hi all, Hi wnguyen,

Yup, things have changed, the 2005 BK overhaul got rid of the 'retain and pay' option, making repo-happy lenders...well...happy.

But then lawyers realized that the 11 U.S.C. §541(c) also nullified the clause in contracts that filing a BK was an 'ipso facto' breach of contract.

So, the way things stand now is that lenders can require you to sign a reaffirmation agreement (or redeem or surrender). But if they drag their feet and don't get one in place by 45 days post 341, or if the BK judge disallows it, then you and the lender abide by the terms of the contract just like before. They can repo for the same reasons they could repo originally, late payments, no insurance, etc.

Caselaw has been building up in the last year or so backing this up. What I haven't seen, is a case where a debtor signed the reaffirmation, then took advantage of the 60 day window to rescind it, thus deliberately pushing past the 45 day post 341 timeframe. Now they would have protection under 11 U.S.C. §541(c) to prevent the BK from breaching the contract and are past the date for the lender to require a reaffirmation.

....I am starting to sound like a lawyer...need to take a few days off from this stuff....

Tom in Colo

[ladycee]

Hi Wnguyen and Tom,

So you are both in countdown to discharge. Well, Wnguyen if you think they will let you ride thru with the car loan make sure you never miss a payment. Good Luck.

In my situation, I have 18 mos left to pay off the car and then they send me the Title free and clear. Toyotal Corolla with only 18,000 miles on it.....March 2012 it's all mine. That's when it will need a Timing belt ...yada yada....

I have started paying my svgs acct on a regular basis, so that I never have to depend on a credit card for emergencies ever again as long as I live......Hope I can stay "off the grid" forever.

These cc companies are monstrous.

I will post to update if my car reaffirmation gets approved or not, but I think as long as I make the effort to reaffirm, they will let me continue paying till Payoff.

Take care,

Chris

[tcreegan]

You are rocking along Chris, remember if they do try to repo, throw 11 U.S.C. §541(c) in their face....

Tom in Colo