Ford Credit - reaffirming

[manglicmot]

I just got slapped with a fine after a misdemeanor conviction, so despite my best efforts I may be filing. I thought I was going to be able to avoid it, but it looks inevitable now.

Reaffirming appears to be the sticking point. I was mortified when I read the thread by someone who had thier car repossesed even after reaffirming and making payments on time. How exactly does this work? Do I ask Ford Credit ahead of time to send me a reaffirmation agreement, or do I send something to them first? Are they going to change the terms of the loan, raise the interest rate, raise the minimum monthly payment?

It seems as though once I sign the reaffirmation agreement I can be sued by Ford Credit if I am unable to make the payments. So considering that, wouldn't I be better off trying to "ride-through"? Just make the payments on the discharged debt and hope that they do not reposses the vehicle.

I thought I understood that BK laws allow you to discharge unsecured credit card debt that is more than 90 days old. However, I've noticed in some threads that it is actually 6 months for large purchases or cash advances. Does anyone here have experience dischaging cash advances that are less than six months old? I made a large charge on a credit card for attorney fees in December, $4000 to be exact.

The hours at work continue to drop, and I have all of my paystubs from my employer's website. I can easily document a drastic drop in pay. In July of last year my pay was up around $900 per week and it has steadily dropped, last week I only made $400. Will the judge, or trustee or whomever, see this as a valid reason? Why not, it is the same as losing a job and taking a lower paying job, right?

My hair is falling out in clumps. I don't think I've ever been so scared and stressed in my life.

[bige1030]

I just got slapped with a fine after a misdemeanor conviction, so despite my best efforts I may be filing. I thought I was going to be able to avoid it, but it looks inevitable now.

Just remember that the fine is nondischargeable. However, bankruptcy will still help you if paying the fine gets in the way of paying your other debts.

Reaffirming appears to be the sticking point. I was mortified when I read the thread by someone who had thier car repossesed even after reaffirming and making payments on time. How exactly does this work? Do I ask Ford Credit ahead of time to send me a reaffirmation agreement, or do I send something to them first? Are they going to change the terms of the loan, raise the interest rate, raise the minimum monthly payment?

It seems as though once I sign the reaffirmation agreement I can be sued by Ford Credit if I am unable to make the payments. So considering that, wouldn't I be better off trying to "ride-through"? Just make the payments on the discharged debt and hope that they do not reposses the vehicle.

It seems like the repossession happened due to bad communication between a primary and a secondary lender, so that's somewhat reassuring if you reaffirm with your original creditor.

But yeah - the reaffirmation process goes something like this:

1. Creditor receives bankruptcy papers, noting an intent to reaffirm on their loan. (You *have* to state what you intend to do with your secured loan on a Statement of Intention filed with your petition.)

2. Creditor (or their attorney) sends you a reaffirmation agreement, which should keep the original terms of the agreement in force.

If they try to pull worse terms on you, it's possible that you could "ride-through" with their loan - something they don't really want at all. But of course, you'd have to prove that if and when they ask the court to lift the automatic stay in the case.

Some savvy debtors could get the creditor to alter the terms of the agreement in their favor by negotiating under the threat of surrender. However, this is becoming less and less common because the new law practically forces debtors to redeem, reaffirm, or surrender.

3. You sign the reaffirmation agreement.

4. If the creditor (or their attorney) signed it, you file it with the court. If not, you return it to the creditor (or their attorney). The creditor (or their attorney) will then sign it and file it with the court.

5. If you have an attorney, and you can obviously afford the payments, that's the end of the process.

If you have an attorney and it's not obvious that you can afford the payments (from disposable income), there will be a hearing about the agreement, where your attorney has to convince the judge that you can afford the payments.

If you don't have an attorney, you have to appear before a judge, who will make sure you understand what you're doing.

I thought I understood that BK laws allow you to discharge unsecured credit card debt that is more than 90 days old. However, I've noticed in some threads that it is actually 6 months for large purchases or cash advances. Does anyone here have experience dischaging cash advances that are less than six months old? I made a large charge on a credit card for attorney fees in December, $4000 to be exact.

What is explicitly written in the law is the presumption period: Cash advances of $750 or more within the 70 days before filing and purchases for luxury goods and services of $500 or more within the 90 days before filing are presumed nondischargeable - it would be up to you to prove an intent to repay. After that presumption period, the creditor has to prove that you had no intent to repay their debt if they want it declared fraudulent, and therefore nondischargeable.

That idea of 6 months is not explicitly written in the law. However, it is often easy for creditors to prove that you had no intent to repay a debt that you incurred within 6 months of filing. As the debt gets older, it is much harder to prove that you had no intent to pay.

Does your attorney take credit cards? If so, s/he had better have a good explanation if and when the creditor files a motion to determine dischargeability of their debt.

The hours at work continue to drop, and I have all of my paystubs from my employer's website. I can easily document a drastic drop in pay. In July of last year my pay was up around $900 per week and it has steadily dropped, last week I only made $400. Will the judge, or trustee or whomever, see this as a valid reason? Why not, it is the same as losing a job and taking a lower paying job, right?

Even voluntary quitting a job for a good reason isn't a problem, either. One poster, CATCHMEIFYOUCAN, converted his 13 case to a 7 after quitting a job on the advice of his judge. So if that's not a problem, an involuntary reduction of hours shouldn't be a problem, either.

[avega]

I received a reaffirmation agreement on a vehicle that I bought last year and they reduced the rate by 7%, the balance by about $8K, and the term by over a year. Even with the term reduction my payments are over $200 less per month!!

[no_it_all]

<snip> I was mortified when I read the thread by someone who had thier car repossesed even after reaffirming and making payments on time.

Yeah, I read that thread a couple of times myself..understand that we heard one side of the story, and it looks like they really weren't getting the payments to the right creditor...Believe me, Ford wants cash, not another vehicle so don't even sweat it...

[manglicmot]

I received a reaffirmation agreement on a vehicle that I bought last year and they reduced the rate by 7%, the balance by about $8K, and the term by over a year. Even with the term reduction my payments are over $200 less per month!!

Wha??? That's very surprising, I would expect that they would make the terms worse.

[JollyGG]

When I reafirmed my car my interest rate was also lowered. The total due stayed the same and the length of contract stayed the same. But my monthly payment lowered. I was really surprised when I got the reaffirmation to see the better terms. We only have six months left on payments.

My mortgage reaffirmation, of course, had the original terms.