Question about reaffirm

[lookingforward]

I was discharged last Monday, waiting on closing. I'm just wondering about my car loan with a credit union. I stated my intention to reaffirm, but the cu did not send any paperwork to my lawyer or contact me/him at all after that. I am happy to not actually reaffirm. The way I am understanding the situation is if I stated my intention to reaffirm and the cu does not follow through with the paperwork, then they won't be able to repossess, does that sound right?

[justbroke]

Very interesting. Most credit unions (CU) are pretty strong on their desire to have you reaffirm the debt. And you are correct. If you chose to reaffirm but the credit union never sent the reaffirmtion agreement, then you would typically have the protection of the bankruptcy court so long as you continued to pay.

Did you only have a little left to pay?

[lookingforward]

No, it was actually a fairly new loan. I bought the car in July and filed in November.

[justbroke]

Very interesting that they didn't send a reaffirmation agreement to your attorney.

[lookingforward]

Yes and I never lost online access to my account, which I thought was also strange.

[justbroke]

Maybe they never received notice! At least it reads as though they did not receive notice of the bankruptcy. Otherwise, I don't know what happened.

[lookingforward]

Just to be sure, I checked our filing papers and On the "Statement of Intention for Individuals Filing Under Chapter 7" my lawyer did indeed check the 'retain the property and enter into a reaffirmation agreement" box. Also, they were included in Certificate of Notice as first class mail at the address listed on their website. So maybe they didn't receive the notice but at least I'm sure that the paperwork is correct on our end, which makes me feel better because I am starting to worry about this.

The first time our payment was due after filing I assumed the online access would be gone, and also I wanted to make sure the payment was there on time, so we drove 1.5 hours to the nearest branch to pay in person. They acted super weird and made us wait at the window for about 15 minutes, came back and asked for my husband's ID and made a copy of it, asked him a bunch of questions about our address and contact information. We had paid at this branch before since it is near my husband's chemo clinic and they never did any of this stuff. So we assumed it was because of the bk filing. I guess I should have called and checked on this.

[lookingforward]

So if by no fault of mine the closing comes and no reaffirmation agreement, where do I stand with the cu? What happens if in the future I decide I don't want to keep paying? Does my intent to reaffirm bind me to the agreement if I didn't sign it?

[justbroke]

This is also the interesting thing that happens. Sometimes the address just listed on the website is not a notification address. Some creditors have argued that sending the bankruptcy papers to the "payment" address or a non-correspondence address is not notification. However, most courts have found that the fact that it was sent to "some" address that belonged to the creditor was sufficient notice.

Are they sending you bills? Are they automatically taking payments from another account?

Please reach out to your attorney and let them know that your creditor is behaving as though they did not receive the bankruptcy notice.

[lookingforward]

I will discuss it with him asap.

They aren't on auto pay, and they give me payment coupons in advance at the window. The only mail I've ever received from them was at the beginning of the loan, when they sent me the first three payment coupons and a welcome packet.

[lookingforward]

I haven't talked to my lawyer yet, but pulled an Equifax on both me and my husband. We were discharged on 2/22, just for the info. The cu car loan shows on both of our reports as "Pays-as-Agreed" with all the payment showing up to date. Only comment is "fixed rate". So I checked our other car loan which is with a different cu and on which we did sign a reaffirm and it looks exactly the same. This second loan says "Pays-as-Agreed" with all the payment info, the only difference is under comments it says "Reaffirmation of Debt".

[justbroke]

Interesting that they are treating the one as if nothing happened.

[lookingforward]

What happens if a few months from now I decide it wasn't the right decision to reaffirm. I did state my intention was to reaffirm, but since the cu never sent the paperwork, I did not actually sign anything. Am I free to walk away from the loan?

[justbroke]

If you didn't reaffirm the debt by signing and returning the reaffirmation paperwork, and the case closes, then you are not liable for the debt. You could later surrender the vehicle.

For what it's worth, you can't reaffirm a debt after the discharge is entered. So, if your discharge comes and go and you didn't sign the reaffirmation before the discharge, then the vehicle is not reaffirmed. I would try to see what's going on with the credit union (CU) and whether they're going to allow you a "ride-through" (whereby you just keep paying without reaffirmation). I have never read about a CU allow a ride-through.

[lookingforward]

Just to add this info here in case it helps someone else, I questioned my atty about the above and he sent this:
"The credit union will probably not repossess your car as long as you make payments. Since the credit union did not present a reaffirmation agreement to sign you are free turn over the vehicle back to the credit union without any penalty to you. Likewise if you cannot make an agreement with the credit union to keep the vehicle, the credit union can repossess but you will not have any responsibility for any deficiency or any additional payments. You can continue to use the vehicle even if you don’t make any payments as long as the vehicle is insured.