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    Reaffirm auto loans? Attorney advising to

    I'm in the middle of filing, hoping for BK7 but was advised by my attorney to reaffirm both auto loans if I wanted to keep our cars. My wife uses one while I use the other. From what I've gathered is reaffirming any auto loans is pointless as it only serves to the creditor. I pointed this out to my attorney and she reiterated that while true, many creditors are beginning to require reaffirmation regardless of good payment history or not.

    So my question is, with a loan through Chase Auto and another through CapitalOne Auto, should I still reaffirm?

    Additionally, I've noticed after my creditors have received the BK notice, my online access to pay the auto loans have been removed. Should I not make any auto payments until BK has been finalized?

    #2
    Really depends on where you live. You may be required to.

    Check out the link I posted in this thread:

    My bankruptcy has been smooth thus far, but tomorrow I have a car reaffirmation hearing. I am leaning on not attending and hoping that PenFed will let me do a "ride-through" on my auto loan. I have about $6000 equity in my car and it's value is currently around $6000 (realistically if I had to


    The Circuits are split on Ride Through. Where you don't Redeem or Reaffirm. You might have to Reaffirm in your Circuit.

    Definitely continue making payments. You have to be current when filing Ch 7. Also, you don't wanna come out and find your car(s) is/are repossessed.

    Loosing online access to accounts is fairly common from what I've read. You might even start making payments to a totally different Dept. Different Lenders handle things differently.

    When making payments going forward,.... Document, Document, Document.

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      #3
      If you want to keep the cars, you should keep paying. Creditors cut off online access all of the time, presumably to avoid being accused of trying to collect a debt. Call them and ask them where you can send your payment.

      None of us can tell you whether you should reaffirm, but I will provide some information to consider.

      Keep in mind that stating on your statement of intentions that you intend to reaffirm does not mean that you will end up reaffirming the loan, even if you try to.

      You are in Indiana which is in the 7th circuit. According to my quick research, the 7th circuit does not allow a "ride through" (continuing to pay without reaffirming). So, if you state that you intend to reaffirm, you are required to execute and file a reaffirmation agreement or risk that the court could lift the automatic stay to allow the lender to repossess the vehicle. But, for the reaffirmation to be valid, your attorney has to certify that the reaffirmation is not an undue hardship for you. If your attorney doesn't do that (and in some courts even if she does), then the court has to approve the reaffirmation agreement after determining it is not a hardship. My understanding is that if you attempt to reaffirm, but are not allowed to by the court, then you have satisfied your obligation under the bankruptcy code to act on your stated intention to reaffirm. Ask your attorney about that.

      Also, ask your attorney how many times she has heard of a car being repossessed when there is no reaffirmation, but payments are kept current. You might also try calling the Chase and Capital One bankruptcy departments and ask about their policies about repossessing after BK even if you keep the loan current.

      If after further discussion with your attorney and the lenders, you think there is a good chance your cars will be repossessed if you don't reaffirm, then you need to consider what you have to lose if you the cars are repossessed. How much, if any, equity you have in the cars is the first factor to look at? If you don't have equity, then you should consider a redemption if you haven't already.

      Another factor is that it sounds like you may be on the edge of qualifying for a Chap 7. It could be that in order to qualify for a Chap 7, you need to be able to include the ownership expenses of 2 cars on the means test. If you don't state you will reaffirm or redeem, then you can't claim the ownership expenses on the means test.
      LadyInTheRed is in the black!
      Filed Chap 13 April 2010. Discharged May 2015.
      $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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        #4
        Live in Michigan. Filed Chapter 7, no asset, 2 years ago. Car financed with Ally, did not reaffirm. Ally cut off online access to account when I filed but called & continued to make payments either by mail or direct through a service rep at Ally. Never really did become an issue making continued payments.

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          #5
          Thanks for the additional info, Lady.

          Reading is one thing. Actual experience is a whole 'nother thing.

          Comment


            #6
            We were an Asset Chapter 7. In order to stay with our CU, with whom we had done business for more than 35 years, we had to reaffirm out auto loan and an overdraft protection. Neither one was a problem. We only had about 10 months or so left on the auto loan anyway. And we wanted to keep the car. We lost online access, but after 'Hub spent an hour on the phone with their BK department, it was sorted out and we got our online access back, which was a good thing, as the CU is Ohio, and we are in Florida.

            Good wishes to you.
            "To go bravely forward is to invite a miracle."

            "Worry is the darkroom where negatives are formed."

            Comment


              #7
              Good info, Angelina!

              We're in a similar CU situation. Long distance with a car loan.

              Good to know we might get back online access.

              Comment

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