Question about returning a car

[FLBroke]

Ok, here is my dilemma now. I was discharged in June 2010. I did not reaffirm my car loan but continued to make payments. I am no longer getting statements and I can not log in online to see my account, but they have been reporting my payments on my credit as if bankruptcy never happened. I was kind of glad because at least some payments were showing on my CR. Now, we are thinking of getting a new car, something with higher MPG and with lower payments. I was pre-approved thru Capitol One for a car loan.We owe way more then the car is worth so I don't think trade-in is an option. If I decide to return the car to the lender, can they report it on my CR? That is my biggest fear, since they have continued to report my timely payments since bankruptcy. I have emailed my attorney, of course, no answer from him. I guess I paid him and now there so no more need for him to answer any questions!
Hope someone here knows the answer! Thanks!

[jmanford]

Your loan should say discharged in chaper 7 bankruptcy. Any more reporting by them can be disputed.

[FLBroke]

That's what I thought as well. I am just concerned, because now it doesn't say discharged in bankruptcy. They are reporting as if nothing happened. My credit is up now to 700 since last year, and I don't want anything to happen that would hurt my rebuilding.

[FLBroke]

Ok, little confused now. Got a response from my attorney and he is saying that CU have different set of rules when it comes to reaffirmation. And that they can come after me for the delinquency due to the decrease in value of the car. How is that possible? My understanding is that if a loan is not reaffirmed then it’s discharged in bankruptcy. Payments I made since were voluntary and I have no legal obligation to pay that loan anymore. So, how is it that they can then go after me for delinquency on a discharged debt? Or, report voluntary repossession?
And, if they do, wouldn’t they be in violation of bankruptcy law?
How do I go about finding out exactly what my options are?
Thanks in advance for your input!

[jmanford]

Dude, all they can do is come get their car if they want. Just because your credit report doesn't say "included in chapter 7 BK" for your car loan doesn't mean it won't say it soon.. The report must not be updated yet. You need to make sure. Call CU or whoever has the car loan and ask them if they got the memo that you filed BK and your loan should be discharged. You need to be honest here. The loan is supposed to have been discharged right? That was your intent right? You have copies of your "final decree" right? You have your BK papers that show you listed the car loan as one that you wanted dicharged right? You have the proof. If they screw up on your credit report it can easily be fixed. Most likely they won't.

[IBroke]

So, how is it that they can then go after me for delinquency on a discharged debt? Or, report voluntary repossession?
And, if they do, wouldn’t they be in violation of bankruptcy law?
How do I go about finding out exactly what my options are?
Thanks in advance for your input!

They can't go after you - it wasn't reaffirmed. Reporting a repo would be a violation of the permanent injucntion.

Don't be concerned. Just turn the vehicle in and monitor your credit. If a repo shows up, dispute it. All they can report is "IIB" and a $0 balance.

[debee]

The only difference between a CU and other lender when it comes to reaffirmations is that the "undue hardship" rules don't apply. If you sign a reaffirmation with a credit union, you don't need your attorney to sign off on it and you don't need a hearing. It's good to go as is regardless.

I agree with the others that if you did not sign a reaffirmation with the CU, then they cannot pursue you for any deficiency.

[FLBroke]

Thanks, guys! This is what the attorney wrote to me when I asked the question. To me it wasn't very helpful, but it is what it is.

"Cars are different than homes – if you’ve kept the car all this time and now decide to surrender it, they may try to come after you for the delinquency due to the decrease in value of the vehicle. In addition, credit unions had a different set of rules with regards to reaffirmation agreements. I do not know how they would report this on your credit report."

That's why I got concerned. My credit is finally up at 700, I got couple of credit cards, and I really do not want to do anything to mess up my credit again.

[hrs1980]

How did this turn out?

I'll be in the same boat in a couple months with my leased vehicle.

[FLBroke]

I haven't done anything yet. Still paying, but now they stopped reporting my payments. I am starting a new job next week and hope to get a new car soon. Will just return this one. From everything I have researched, there isn't anything they can do. I wish you all the best!

[hrs1980]

I've had my Honda lease since 10/09 and discharged 4/11 with my lease end 10/12. I've been making payments but I'm already over by 3000k miles and another 8 months to, that will probably be 15k. I'll just drive it as long as I can then just give it back w/o an $0.20 per mile overage charge.

[IBroke]

I've had my Honda lease since 10/09 and discharged 4/11 with my lease end 10/12. I've been making payments but I'm already over by 3000k miles and another 8 months to, that will probably be 15k. I'll just drive it as long as I can then just give it back w/o an $0.20 per mile overage charge.

I doubt you would have to pay any overage charge.

[jetsfan2010]

very interesting.. keep us updated!