I’ve read here that reaffirmation is a bad ideal. I did on my auto and the reasoning was it was only 2 years old with low miles and I owed a little less then it worth. I figured I would pay it off and keep on driving it , hopefully through worst years of bk ruining the credit. Also , I don’t have a nice lump sum of cash to buy outright anyway.
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Don’t want to make this post about me but my situation was similar. I purchased a new car in 2017 and another car in Aug 2019. I filed for BR in Sept 2019, had my 341 meeting in Oct 2019 & should be discharged hopefully the end of this month or next month. I did not reaffirm my car that I got in 2017 and is waiting for my credit union to pick it up. This debt for this car no longer shows on my credit report but my newest vehicle I got in Aug is reporting on my credit as regular on time payments.
If you are almost done with paying on your car, keep doing so! Reaffirm your car. It always look good on your behalf that you kept them out of BR (which they still will have notation about it). if it’s financed at a credit union or bank. They will want to help you in the long run with other loan products once you get back on your feet especially if you never skipped a beat with payments.
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I have never financed a car--I always buy cheap old cars that I can afford outright, and then pay for the repairs to keep them running. However, I am very well aware of the types of interest rates offered to car buyers, both before and after bankruptcy. For most people, credit scores will improve as a result of filing, although lenders may charge slightly higher interest rates to those fresh out of bankruptcy.
Therefore, it might make sense for someone to retain a small amount of negative equity (certainly no more than $2500) if the loan has a very competitive APR. However, under no circumstances would it make sense to retain even $5000 of negative equity, let alone $15k. You should stop paying on this Jeep now, as you are either going to surrender it or redeem it. It makes no sense to do a "stay and pay" on this much negative equity, let alone to reaffirm it!
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Originally posted by Layla55 View PostIf I was 15k under I’d definitely include it in a bk. Any other solutions has to be better then keeping that. Can you afford to go buy something used and cheap before you file?
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Originally posted by bcohen View PostI have never financed a car--I always buy cheap old cars that I can afford outright, and then pay for the repairs to keep them running. However, I am very well aware of the types of interest rates offered to car buyers, both before and after bankruptcy. For most people, credit scores will improve as a result of filing, although lenders may charge slightly higher interest rates to those fresh out of bankruptcy.
Therefore, it might make sense for someone to retain a small amount of negative equity (certainly no more than $2500) if the loan has a very competitive APR. However, under no circumstances would it make sense to retain even $5000 of negative equity, let alone $15k. You should stop paying on this Jeep now, as you are either going to surrender it or redeem it. It makes no sense to do a "stay and pay" on this much negative equity, let alone to reaffirm it!
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Originally posted by Layla55 View PostIf I was 15k under I’d definitely include it in a bk. Any other solutions has to be better then keeping that. Can you afford to go buy something
used and cheap before you file?
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Yes.. you include debt on the vehicle to be discharged and then surrender it. Reaffirm a vehicle means to go back into contract with the lender on a vehicle, house etc in a bk. You don’t have to . I guess it’s a pledge on your part sort of to agree to continue on with your loan. But you don’t obviously want to do that if it’s a bad deal, under water, etc on something. You want that gone.
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Originally posted by Layla55 View PostYes.. you include debt on the vehicle to be discharged and then surrender it. Reaffirm a vehicle means to go back into contract with the lender on a vehicle, house etc in a bk. You don’t have to . I guess it’s a pledge on your part sort of to agree to continue on with your loan. But you don’t obviously want to do that if it’s a bad deal, under water, etc on
something. You want that gone.
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Originally posted by JLM0706 View PostWhat does redemption mean, by the way??
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Originally posted by Layla55 View PostIf I was 15k under I’d definitely include it in a bk. Any other solutions has to be better then keeping that. Can you afford to go buy something used and cheap before you file?
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In your case keeping the vehicle sounds reasonable to me.. you need the extra expenses to get into a chapter 7. If you were definitely qualified for a 7 then keeping the car would be crazy. You need deposable monthly income to be as small as possible so you can’t afford payback in a chapter 13.
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