What's the benefits of reaffirming a car loan

[so-beyond-broke]

Hi Everyone:

Please clarify this for me. I plan to file bk soon perhaps next month. I read the Reaffirmation agreement form M-207 and I was taken back a bit. I noticed that in the form the judge can actually deny your re-affirmation agreement if he sees that it will create an undue hardship. You also have to fill out what your payment is versus your monthly net income. I guess this is to prove that you can continue to make the payments for what you are trying to reaffirm. In my case, times have been rough on and off over the years however 2005 after losing 2 jobs times were REALLY ROUGH. Despite this all, I managed to pay my rent, car, car insurance, food and other things. Almost everything but the CC's - for these I pick and chose which ones the pay 10/15/20 min. payments of course. Can a judge decide that he will not let me re-affirm? I've never missed a payment on this car since I got it back in 2001. I have about $3200 left to pay and I expect to finally own this car by X-mas. If the judge can deny this re-affirmation agreement, why file a motion? Can I just keep paying the car w/o listing it in the bk? I know that if I reaffirm, then I am on the "hook" for this car if I default (until December or sooner if its paid off). Obvious if I stop paying then they will take the car and I have come this close and struggled to pay it off. I thought reaffirming was the best thing but now I feel like I should just continue to make payments because I am current and up to date on my loan. Will the bank know of my bk and ask me what my intentions are?

Anyone have experience with this - reaffirming a car loan? Were you denied by the judge? Did you have to appear in court for this? I worry that the judge may decide that my car note of $330 is too much and can be used toward paying back my creditors instead.

sbb

[edwards2]

We filed a Chapter 7 and reaffirmed on our cars and house. I assume you are filing a Chapter 13. I have heard both sides of the reaffirmation argument. We elected to reaffirm on the house because we intend to keep it and I was leery about not "firming it up" with the mortgage company. I realize if we default we have to pay the difference in what they sell the house but knowing I have the security of making payments was enough for me. BK made me nervous anyway and the property where I live is hot property. On the car we had a personal loan and a car loan with our local credit union. I only have a few more payments for one of our cars to be paid off but the credit union said we HAD to reaffirm both loans or none. We couldnt take a chance there either because they obviously would be able to sell my car and I would be left with nothing. If you hired an attorney I would ask him what the likelihood of the judge not approving the reaffirmation on your car. Good luck...

[so-beyond-broke]

I am filing a no-asset Ch7. I don't earn enough to even think about a Ch 13

sbb

We filed a Chapter 7 and reaffirmed on our cars and house. I assume you are filing a Chapter 13. I have heard both sides of the reaffirmation argument. We elected to reaffirm on the house because we intend to keep it and I was leery about not "firming it up" with the mortgage company. I realize if we default we have to pay the difference in what they sell the house but knowing I have the security of making payments was enough for me. BK made me nervous anyway and the property where I live is hot property. On the car we had a personal loan and a car loan with our local credit union. I only have a few more payments for one of our cars to be paid off but the credit union said we HAD to reaffirm both loans or none. We couldnt take a chance there either because they obviously would be able to sell my car and I would be left with nothing. If you hired an attorney I would ask him what the likelihood of the judge not approving the reaffirmation on your car. Good luck...

[StaciMM]

Under new law, things are a little different. If you don't reaffirm, then the auto. stay expires prior to discharge. Meaning that if you're behind, you'll likely lose the vehicle.

If you're current and fail to file the reaffirmation, I don't know if there is anything that could be done. The lender will likely not want to pick it up, unless you default.

[Ccarter718]

Hey

My fiance did her bankruptcy and did not include the vehicle in the BK and did not reaffirm and on her CR, it states that it was included in the BK and we are still making payments. They state that it will remaine that way until the loan is paid in full.

[StaciMM]

Ccarter-more than likely, she did include the car loan. All debts get listed. There is one page for secured debts (such as car) and another for unsecured. If she counted the car payment in her expenses, then the trustee would have questioned it if she had no car loan listed.

By not reaffirming, the debt is included in bankruptcy. As long as she makes the payments, she should be able to keep the car. If she reaches a point where she can't, she can give it back-no balance owed.

[Ccarter718]

Wow.. that's good info to know. Because we are upside down on that loan. expidetion not worth a cent but owe about 14 to 15 grand. if that's the case, that car is going right to the bank. Shoot, i'll meet the repo man half way.

[suprdav2]

yeah, I found this out the hard way. I asked our atty about reaffirming my auto loan. He said no need, just keep making the payments. I checked my credit w/Experian the other day and noticed that for the car loan, $0 balance owed, and no payments were being reported. So I call up Bank of America, asked why nothing being reported and why the $0 balance when I'm only half way thru paying the car off. The nice rep stated that since I didn't reaffirm, that it's reported as included in bankruptcy, etc, and that it will not be reported on my credit any further. I was hoping it would since I'm never late on it, and wanted to use it to help build back up my credit. She said on the other hand, if I no longer wish to keep it, I can just stop paying on it, and have arrangements made to just pick it up, and it doesn't report on my credit that I stopped payments on it. She continued to say that they see a lot of this, peeps in bk not reaffirming their loans by advice of attorney, and wonder why it no longer shows on their credit. Wish I knew ahead of time that it wouldn't report....otherwise I would have reaffirmed.