Retain and pay, has anyone ever been repoed?

[telco95]

We choose to retain and pay our house and vehicle when we filed. I'm worried about getting our vehicle repoed because we did not reaffirm. Has anyone ever experienced a repo after bk because you didn't reaffirm, but were current on payments, never late?

Thanks

[tcreegan]

Hi telco,

"Retain and Pay" is no longer an option in a Ch 7 BK....you only have Redeem, Surrender, Reaffirm

1) Legally they cannot repo as long as you are following the terms of the contract (current, insurance, etc)

2) But legally they can require you to sign a reaffirmation.

3) But legally the court can deny the reaffirmation and you can rescind it within 60 days, now you are back at (1)

The relevant law is 11 U.S.C. §541(c)

Tom in Colo

[debee]

The whole thing is nuts.

[Fallonedward]

Out attorney just told us that in our state their are numerous examples of folks doing a "retain and pay on their house". This board contains many posts telling folks not to reaffirm their mortgage.

So I guess I'm a little confused

Hi telco,

"Retain and Pay" is no longer an option in a Ch 7 BK....you only have Redeem, Surrender, Reaffirm

1) Legally they cannot repo as long as you are following the terms of the contract (current, insurance, etc)

2) But legally they can require you to sign a reaffirmation.

3) But legally the court can deny the reaffirmation and you can rescind it within 60 days, now you are back at (1)

The relevant law is 11 U.S.C. §541(c)

Tom in Colo

[ccsjoe]

Fallonedward,

Two very separate complexities here, house vs. car. It is true that retain and pay is no longer an option under CH7. However, repo'ing a car is much simpler and cheaper than going through the motions to repo a house (foreclose). That is why most lenders have accepted a de facto policy of continuing to allow retain and pay on homes. As for a car, most lenders will allow a retain and pay, but some will repo. Depends on the company you are dealing with and your loan balance. It is a lot easier and cheaper to repo the car.

[backtoschool]

I have to agree with ccsjoe that retain and pay for a car is much riskier than for a house. It will all depend on the resale value of the car. A bank doesn't want people driving around in a car with no legal obligation to that car because there is a much bigger chance that someone will run the car into the ground and not maintain it and then just walk away from it. It is in the bank's interest to repossess the car early on and resell it.

Of course in this economy, anything is possible and some banks do not want the cars back. It is a risk even with those banks, because they may sell the loan, or may come get the car if you are only a month late or something. Bankruptcy is supposed to be a fresh start and worrying if a repo man is going to come take your car is not a totally fresh start in my opinion.

[wnguyen]

Even my car has acceptable resale value and I'm not upside down and I can afford to pay the monthly payments, I still didn't reaffirm it.

[keepinitreal]

We choose to retain and pay our house and vehicle when we filed. I'm worried about getting our vehicle repoed because we did not reaffirm. Has anyone ever experienced a repo after bk because you didn't reaffirm, but were current on payments, never late?

Thanks

I asked my attorney this question and he said he's never had a client who was current with payments get repo'ed.

[Fallonedward]

That is why I am reaffirming my car and not my house. I want to be able to sleep and night and not worry anymore

I have to agree with ccsjoe that retain and pay for a car is much riskier than for a house. It will all depend on the resale value of the car. A bank doesn't want people driving around in a car with no legal obligation to that car because there is a much bigger chance that someone will run the car into the ground and not maintain it and then just walk away from it. It is in the bank's interest to repossess the car early on and resell it.

Of course in this economy, anything is possible and some banks do not want the cars back. It is a risk even with those banks, because they may sell the loan, or may come get the car if you are only a month late or something. Bankruptcy is supposed to be a fresh start and worrying if a repo man is going to come take your car is not a totally fresh start in my opinion.

[keepinitreal]

Bankruptcy is supposed to be a fresh start and worrying if a repo man is going to come take your car is not a totally fresh start in my opinion.

OTOH, putting yourself back on the hook for a debt after your liability was released when you filed is also not a fresh start, in my opinion.

To each his (or her) own.

[tcreegan]

Hi all,

Yeah a little confusing, retain and pay is not an official option in a BK, but it happens all the time b/c lenders let it happen. A 'back door' retain and pay if you will...

It would really be handy to know if your district has ruled on 11 U.S.C. §541(c) which makes repo for BK alone not legal.

Tom in Colo

[backtoschool]

OTOH, putting yourself back on the hook for a debt after your liability was released when you filed is also not a fresh start, in my opinion.

To each his (or her) own.

Yes I totally agree. I just think it's a matter of specifics: how good is the interest rate you have on the car, is the car underwater, how much tolerance for ambiguity do you have. I do not like financial ambiguity so I didn't have the stomach for not reaffirming. I ended up trading in the car anyway last month for a new car anyway.

[DebtEnder]

I have never heard of a house being taken so long as payments were kept up. However I have heard Chrysler and Ford motor credit have been known to repo if case is closed and reaffirm was never done. So ymmv. I rode thru a car loan from Carmax for awhile and then offered a lump sum for about 1200 less then owed a few months after my case closed. Admittedly my offer was only 1100 bucks.

[mikeyisbroke]

my attorney told me not to do the reaffirm on my car - while it is risky and they can legally repossess, he said that my lender has never done it if you keep your payments current.

[idainc]

B of A has done a ride through with me. And I advised them from the get go that I'd have to miss a payment. They told me not to go over 30 - 45 days late or they'd be out for the car. I am right a book value retail bit wholesaleis about 5K less so I guess they feel its in their best interest to monitor it. I've never missed a payment since April. IT begs the question if they'd bother to send a letter first becasue I have not volunteered our new phone number becasue we all know what happens with that.