Reaffirm not necessary?

[bethe23432]

That's what my lawyer says. So far he has been great, but I'm nervous. The note holder, which is also my bank where I have my checking account, told me I have to either reaffirm or surrender the vehicle. I have not missed a payment or made a late payment since I bought it in July of 2005. It is worth about or a little more than what I owe on it. Does anybody know if they will do anything or will they just do nothing as long as I make the payments, which seems to be my lawyer's opinion. The bank is SunTrust. Somebody tell me something to make me relax about this, I do not want to lose this vehicle.

[SinkingFast]

Ride Thru is no longer allowed under New Law. Some Districts, however, are still allowing Debtor/Filers to do Ride Thru on loans. Maybe that's the case in your District.

As to that specific Creditor,.......... I can't say. Maybe someone who's done business with them can tell you for sure how they handle these types of situations.

[ConnieS]

In my case the bank that holds the note on my car closed my account with them and would NOT accept any further payments until I reaffirmed with them. I only owed 5 payments on the car so it's a no brainer anyway. My mortgage and HE however, not a word, I have just continued payments all along.

[bethe23432]

Wow, Connie, you and I are on the exact same timeline! I filed mid-August, 341 was on September 21 and my LDO is late November too. See now, what you said, that's what I'm afraid of. I already had to change my personal bank account from a bank I had used for years to Suntrust because I had a Visa with the first bank and I was afraid they would snatch money out of my checking account that was designated to a rent check and use it toward the Visa account I was no longer paying on. So I got a checking account at Suntrust which enabled me to pay the vehicle payments right out of the checking account online. Now I'm afraid if I don't reaffirm they will get pissed and then what? Just like you said, they may close the loan account and mess with my checking account too! And yet, my lawyer says not to worry about it, just keep making the payments. I told him what the bank said and he said, "Are you going to believe them, they are the enemy." He said he has only seen a car loan holder actually do something in one case and it was Ford Credit. He's making me nervous.

[CATCHMEIFYOUCAN]

Betholonia, I sent you a PM on this. Some banks/creditors request that you re-affirm, some don't. I would sign the re-affirmation papers so you have proof you are going to continue repaying them and they can't take your car. In my case, ffx hyundai didn't ask me to sign re-affirmation papers, they just sent me a note card stating I should make regular payments the 14th of each month. It just all varies state to state and creditor to creditor whether they want reaffirmation papers or not. If they are requesting reaffirmation than I would go with it!

Catchmeifyoucan

[bethe23432]

CMIYC, I got your message and I appreciate your quick response, thank you. I think I would sign the reaffirmation papers except that the bank told me they mailed them to my lawyer in August. He would not return calls or emails until I finally just got lucky and caught him in the office by phone and he talked to me. That's when he told me Suntrust is "the enemy". But my point is, they sent HIM the papers, so how can I sign them if he's telling me not to? I think that the bank is not supposed to initiate contact with me until after the discharge which should be in the next month or so, but after that I don't know what they will do. I called them to ask what I should do, that's when they told me I had to reaffirm or surrender. I'm really confused now. It appears there is no way to really know what they will do other than wait until after the discharge.

[bezoar]

An interesting read on this subject is here (pdf document - Jan 2006):

http://papers.ssrn.com/sol3/papers.c...ract_id=825206

(click the "Document Delivery" icon at the upper left.)

Most of the 'ride-through' discussion starts on p. 19.

[lrprn]

An interesting read on this subject is here (pdf document - Jan 2006):

http://papers.ssrn.com/sol3/papers.c...ract_id=825206

(click the "Document Delivery" icon at the upper left.)

Most of the 'ride-through' discussion starts on p. 19.

Thanks for the link, bezoar....very interesting article!

[HHM]

One benefit to reaffirming that you are "supposed" to get, and should be written in the reaffirmation agreement, is that the finance company should continue to positively report the debt on your credit report (i.e. Paid as Agreed).

Basically, whether you need to reaffirm or not is up to your creditor, if they refuse your payments and insist on reaffirmation, then you either must reaffirm or surrender (or redeem). If they acquiesce to receiving payments and do not require a reaffirmation, then you might be able to get a ride through; however, with a ride through, the finance company can fairly your report your car loan as "Included in Bankruptcy"

Anyway, just something to think about.

The other thing to consider with a reaffirmation is to see if you can negotiate a better deal. I.e. get a reduction in the principal owed, or shorten the term (i.e chop off a few payments).

[bethe23432]

I really appreciate all this information. The linked article was fascinating. However, I still don't know what to do. If the bank sent my lawyer the reaffirmation papers and he doesn't want me to reaffirm and therefore ignores the whole thing, what do I do? Just wait until after the discharge and see what happens?

[lrprn]

I really appreciate all this information. The linked article was fascinating. However, I still don't know what to do. If the bank sent my lawyer the reaffirmation papers and he doesn't want me to reaffirm and therefore ignores the whole thing, what do I do? Just wait until after the discharge and see what happens?

Bethelonia, take a look at this website that discuss the ins and outs of reaffirmation after the new bk law took effect a year ago:

http://www.debt-relief-bankruptcy.com/faq-browse11-12/bankruptcy-guide.asp

The key here is whether you are willing to take a chance (however small it might be) that SunTrust could repossess your car even if you continue to make on-time payments after filing. The new law removed the gurantee if you made ontime payments, your car could not be repossessed. After last October when the new law went into effect, if your car is worth a lot more than the loan value and was purchased in the last 910 days, then most lawyers agree that reaffirmation is the best option. However, if the car is worth a lot less than the loan value no matter when it was purchased, then most lawyers are recommending continuing to make the loan payments without signing a reaffirmation because although the lender could repossess, they will get more money from allowing you to continue to make the payments than if they repossess the car. Lenders like money in hand, not cars in hand which they then have to sell for a potential loss.

In our Ch 13 case, we took our lawyer's advice and did NOT reaffirm our cars. One was worth about the same as the loan (purchased more than 910 days ago), one was worth significantly less than the loan (purchased less than 910 days ago). Ford Credit has left both cars alone now for six months and is happy getting their money every month through our trustee.

Bottom line....the only way to absolutely 100% guarantee that your lender cannot repossess your car is to reaffirm the loan. However, I couldn't find a single example of a car purchased less than 910 days ago with a value the same or lower than the loan value being repossessed by a lender or the trustee. Only you can decide if it's worth taking the risk of not reaffirming.

[CATCHMEIFYOUCAN]

This sounds complicated this whole reaffirmation agreement thingy, I guess trust in the lawyer "Beth...," if they try to pull any poop, the lawyer surely will get them! Maybe that is what is counting on? I hope they don't take the car. Information/paperwork gets missed when the repo man comes, than things get complicated.

Catchmeifyoucan