Hearing for reaffirmation but no undue hardship?

[smallpanda]

Hi there - my husband and I filed a ch 7 in Texas in January then had to move to Utah for work. We filed a reaffirmation agreement for our truck with Wells Fargo and our attorney signed it and marked that there was no undue hardship. Our income covers all expenses. However, last week I got a notice for a hearing regarding this agreement. I guess I'm just confused as to why we have a hearing when our attorney indicated there was no hardship? Luckily they said we can attend the hearing over the phone but I'm still concerned that we will lose the vehicle. We have a second vehicle that we are going to surrender so I hate to surrender that and then lose the truck as well and be in a bad spot. All of our payments are current. What do you think will happen at the hearing?

[LadyInTheRed]

Your court might require hearings on all reaffirmation agreements. I haven't been to a reaffirmation hearing, but I suspect the judge will ask you if you understand the consequences of the reaffirmation and whether you can afford the payments. He might look at your schedules to determine whether he thinks it is a hardship to reaffirm. I don't know whether a judge can disallow a reaffirmation agreement if your attorney signed a certification stating it is not an undue hardship.

You should run your questions by your attorney.

[despritfreya]

Simply put, judges DO NOT like reaffirmation agreements as approving them denies a debtor the "fresh start" that bankruptcy is suppose to give. I am not in Texas but I will bet dollars to donuts that the judges in Texas do exactly what the judges in Arizona do - hold a hearing, listen to the debtor and then state that approving the agreement is not in the best interest of the debtor. Read this. . .

https://www.courtlistener.com/opinion/1521399/in-re-moustafi/

and you will understand what is going on.

Des.

[bcohen]

You should have asked your attorney to NOT sign off on the "no undue hardship". That way, you would be able to discharge the debt, but keep the vehicle as long as you continue to make the payments.

If the judge refuses to approve the reaffirmation, then you receive the benefit of discharge, but the lender CANNOT legally repo the truck unless you fail to pay--even if the loan contract contains an "ipso-facto clause" that filing for bankruptcy puts you in default. If at some point, you lose your job, the truck is destroyed in an accident, etc, then you could stop paying at that time, and your liability for any deficiency would be discharged.