Reaffirmation agreements

[Boscoe]

What is the creditor's options if you don't sign a reaffirmation agreement? This question is for a car. I know they technically can repossess, but if you are paying on time each month and have for well over a year, that is almost definitely not going to happen.

Aside from refusing to report your payments to the credit reporting agencies, what other realistic options do they have?

And what is the general consensus on what to do?

[Minnymouth]

Under the old laws (before Oct 2005) you did not have to sign a reaffirm on an auto in order to keep it, you could just keep making timely payments.

Under the new laws you are required to sign the reaffirm or they can repo the auto anytime they wish, whether you making timely payments or not...... though most will not repo if you are making on-time payments. They want your money not the auto back.

[SinkingFast]

As Minny said,.......... New Law does not contain provisions for "Ride Thru". You're supposed to Redeem or Surrender. But many attnys are getting around this stipulation by having Debtors file an "Intent to Reaffirm" but never filing a signed Reaffirmation Agreement.

Only time will tell what's gonna happen to all the houses and cars that people did not Reaffirm.

So far, it seems, as long as you continue making timely payments, Creditors are allowing BK Filers to keep their property. Lenders are in the business to make money by extending loans. Not by owning houses and cars.

What's gonna happen when the equity far exceeds what's owed, down the road, is anyone's guess.

[Minnymouth]

Yeah, Sinkingfast, I had contemplated that part about down the road when the equity is high on the property or the auto. Because basically if the reaffirm papers ARE NOT SIGNED the creditor can "repo" at any time they wanted too. Payments current or not.....

So worse case sernario... have your property almost paid off then have the creditor repo it and sell it. And then end up in a court battle trying to keep them from doing it......

Wonder if that "sernario" has happened yet???? Interesting!!

[Boscoe]

Thanks for the posts. To follow up, if no reaffirmation is signed, do most lenders continue to report to the CRA's? And are there any notations in the credit report if you DO sign one, i.e. "reaffirmation agreement signed" or something similar?

[HHM]

If you do not sign the Reaffirmation (and in most cases even if you do), the account will be listed as IBB (Included in Bankruptcy), and its not likely they would continue to report the payment history. Maybe someone who has gone through the process can tell us if they continue to report payment history.

[lrprn]

As Minny said,.......... New Law does not contain provisions for "Ride Thru".

Actually on the Ch 13 side, if you've owned a car for more than 910 days, the current bk law does allow a "ride-through" for its value only. Only on cars less than 910 days old does the Ch 13 filer have to pay the full loan amount back.