Reaffirmation Agreement

[newimges]

Hi everyone.

I filed Chapter 7 pro se on October 3rd. I plan on reaffirming my auto loan through HSBC Auto Finance and my mortgage through Countrywide. I am current on both of the accounts. I sent both of them my statement of intention to reaffirm on October 19th but haven't heard from either of them. I read that most of the bigger creditors will send out the reaffirmation agreements themselves for me to sign but it looks like I will have to make the reaffirmation agreement myself and send it to them.

Has anyone dealt with either of these creditors and reaffirming?

It is my understanding that I have 30 days from the 341 meeting (November 20th) to follow through with my intentions regarding secure debts which would include these reaffirmation agreements. I will also need to file for a hearing to have the court approve the agreement since I am not being represented by an attorney. What happens if the creditor doesn't sign the agreement I send them within the time frame? Will I need to amend my statement of intention to surrender the property? Will this hold up my discharge?

Thanks in advance.

[ssdsco]

If you haven't you might want to considered not reaffirming so you have move flexibility down the road. There's some threads that discuss the pros and cons.

[HenriettaHen]

If you filed pro se, then it will be your responsibility to draw up the reaff agreements, call the creditors to find out whose attention to send the papers to, and then mail them certified mail, return receipt. I found that the creditors are terrible about following through with it (even though you would expect otherwise...). Do everything possible to make it easy for them to do - send a SASE, even.

Call your contact in a few days to see if the papers are moving along back to you, because you have a deadline for filing them with the court.

When you get your signed agreements, file them with the court.

The court will send you a notice of a hearing date for each agreement - and you will be responsible for serving these notices to each creditor (and then filing proof of service with the court). Certificate of Service forms should be available in your court's website. You'll need to have a friend or associate mail the forms for you with a signature.

Then you show up for the hearing, and the judge decides if your reaff is a hardship for you. If he decides to order your reaff, then you will be responsible for the debt outside of bankruptcy, as if you never filed. If he decides to decline to order your reaff, then you're on your own with the creditor - you can continue to pay, but if you default then you will not owe a balance.

Some creditors are okay with you continuing to pay on an unreaffirmed debt, and will allow you to keep the property - some will not.

The new law reads that you must reaffirm, redeem or surrender secured property - however, each case seems to be taken individually by both the judge and the lenders alike.

[drummer1]

I have a lawyer, however, I am very concerned about my mort. They have not sent any re affirmation agrements..My lawyer said not to re affirim, but something about that just doesnt feel right to me, I need to know more about this, what are the advantages of them not sending a re affirmation letter? and what are the advantages or signing one? It all boils down to us not wanting to jepordize our home, if signing one of these prevents that I will right away? Is this someting you can really gamble with?

[robivi3]

The re-affirmation would begin with your lawyer contacting them if I remember right. If you can keep your home then make sure that he requests the documents. He may just not want to bother. That would not feel right to me either.

[ssdsco]

Here's a related thread.

http://www.bkforum.com/showthread.php?t=18499&highlight=reaffirmation

[newimges]

Thanks all...

If you filed pro se, then it will be your responsibility to draw up the reaff agreements, call the creditors to find out whose attention to send the papers to, and then mail them certified mail, return receipt. I found that the creditors are terrible about following through with it (even though you would expect otherwise...). Do everything possible to make it easy for them to do - send a SASE, even.

I will contact these creditors today and get the agreements sent out to them by certified mail as you suggested.

I am not as worried about the mortgage as I am with the auto loan. I don't want to keep the van without an affirmation agreement. Otherwise they can repossess the van at anytime and I would be responsible for extra fees. If they do not sign the reaffirmation agreement would I then have to amend the statement of intention to reflect my intent to surrender the van? Or can I just call HSBC and surrender the car to them on my own and without the reaffirmation agreement the van would be discharged regardless of the Statement of Intention?

[newimges]

I contacted HSBC earlier today and was transferred to a voice mail. I left my name and number and will hopefully hear back from them later today or tomorrow.

[HenriettaHen]

If you don't reaffirm the van, then they could legally take it if you missed a payment - however, I do not think you would be responsible for fees, since the auto loan is actually discharged. If you reaffirm, then, yes - you would be responsible for the debt, deficiencies,etc.

Even if the lender signs the agreement, the judge may now allow it. This is what happened in my case - I went to all the trouble to get the reaffs done, then went to the hearings in a distant city to hear the judge decline to order the agreements (hardship). However, I'm still driving my car! If I miss a payment, they could take it - but on the other hand, if I run into terrible difficulties again, I could abandon the car and owe nothing.

Much is made of this confusing reaff process. If you are filing pro se, it's actually SIMPLER, I think. YOU control the process. I've read all kinds of confusing tales about what happens when lawyers and lenders do the reaffs.... I'll take it my way, thank you! Go through the motions (heh, heh - little BK pun there) and let the judge decide. If the agreements are never returned to you, all you have to do is show your return receipts, certificates of service, etc. That shows the Court that you have made every effort to reaffirm.

If you are worried about repo, then get on the horn and call your lender. They should be able to give you some kind of an answer about what they do in this scenario.

[newimges]

Thanks for all your help HenriettaHen.

I think you are right. I am probably worrying too much about this. This whole bankruptcy thing has me freaked out most of the time especially doing it without an attorney! So far I have freaked out for nothing (knock on wood!) Did you file pro se as well? It sounds like you did.

I finally got an address for a lawyer who is the authorized agent for HSBC regarding this matter so I have already made a draft of the reaffirmation agreement and will sent it directly to him today certified mail. I requested that he sign and return it within 14 days of receipt so that I could file it with the bankruptcy court.

So basically if they don't sign the reaffirmation agreement - the van gets discharged with the bankruptcy and I can continue to make payments on it and keep it otherwise they will reposses it which they would do even if the reaffirmation was signed.

I did try to call the lender directly yesterday but I got forwarded to their legal department and got a voice mail. I left a message yesterday afternoon but haven't heard back yet and honestly don't expect to.

My income is slightly higher than my expenses (around $54 more and that includes the van payment) so hopefully the judge will approve it. Were your expenses higher than your income when you filed?

Thanks for all your help. I really appreciate it!

[HenriettaHen]

Did you file pro se as well? It sounds like you did.

Yep! Quacks like a ... oh, never mind.

... otherwise they will reposses it which they would do even if the reaffirmation was signed.

They would (hopefully - and you should ask this question) only do that if you fell behind on the payments. Simply put, in either case scenario - reaff or not - they will take the vehicle if you don't make your payments. Reaff makes you responsible for the debt past bankruptcy - no reaff means the loan is discharged with everything else, but you keep paying it anyway and keep the car. (Unless you don't pay, then you lose the car.)

You would think that lenders would be jumping all over these reaffirmation agreements, wouldn't you? But it appears that they don't bother in some cases, because there is a high likelihood with no asset Chap 7's that the judge won't approve the agreement anyhow. The bankruptcy judge must decide what is in your best interests - unlike the trustee.

Do they want to collect used cars from people who really want to keep them and keep paying? NOT. That would be silly, even though they use repo to scare you. They want your money, honey - not your car.

In some ways, the reaffirmation process is a perfectly good waste of paper, ink and the Court's resources, in my opinion.

Interestingly, even the lawyers don't want to sign off on reaffs, because they would have to certify that they have found it causes no hardship to you. Right! Instead, they lose the papers and shuffle them endlessly until it's all over with - so don't stress over it.

My income and expenses run neck and neck in a never-ending race, like yours. You can probably expect a denial, but go through the process anyway. If you make the effort as a pro se filer, the judge will look upon you kindly, and make a decision that he feels comfortable with. A decision that is in your best interests.

Stop and enjoy that moment - it doesn't happen often in life.

[newimges]

Thank you - you've been a really big help!

I already had a credit card company send me a letter asking me to reaffirm (I won't of course!) but you would think that the auto and mortgage company would jump at it since I offered to reaffirm with my statement of intentions.

I am still going to try for the reaffirmation but I won't worry about it if something doesn't go through.

Using this forum has definitely helped me a lot. I was very nervous about filing pro se but with the help of the nolo book and this forum - I definitely feel better about my decision and saved a couple of thousand dollars!

Again I thank you for all your help.