Really Confused - Reaffirmations!

[Teddy]

Ok, I signed my BK papers to reaffirm 3 things:

Home Depot - $360 b/c I just bought a stove
Car Loan
Mortgage

After reading here, I am thinking I should go ahead & have him change it to not reaffirm anything.

Advice? I'm getting very confused as I read here.

I called the attorney and she said that it would just be $126 if I did all 3 at once. She said keep in mind not all creditors will play that game - but I think with things the way they are now, I wouldn't have a problem.

I really just need to do what is in my best interest while I'm doing this.

Thanks!

[Cassiopeia]

I don't understand the $126.

Well I reaffirmed my HELOC and my car loan as I did not in any way want to give up my car or my house.

[JollyGG]

Really marking the that you intend to reafirm on your BK petition means nothing. I am assuming from your post that you have not actually signed any reaffirmation agreements (a seperate form that is signed by you and the creditor and filed with the court). If that is the case you are in luck. Basically the intent to reafirm section of the BK petition is just to let your creditors know what you want to do with the property so that they can contact you to work out the details. In order to actually reafirm you need to file a reafirmation that is seperate from the BK petion. If you change your mind about reafirmation it is no big deal. Simply ignore the reafirmation paperwork you will be sent or tell the creditor you have changed your mind.

If you have already filed a reafirmation you have the right to change your mind. Simply recind the reafirmation. You have until 60 days after you sign the reafirmation or until discharge, whichever is later, to rescind a reafirmation if you choose.

I would not recomend amending your BK simply because you don't want to reafirm some things and I am surprised your lawyer didn't outline your options more clearly.

Basically, if you haven't actually reafirmed anything you don't have to do anything.

[PaKettle]

I think your lawyer was negligent in not telling you your options for NOT reaffirming. If the stove has been paid on - even one payment - you can probably get away with not reaffirming. How recently did you buy it?
If the car is not worth more than you owe on it, then I think there is no good reason to reaffirm.
The house, I don't know.
But you should ask your attorney to explain the advantages and disadvantages of reaffirming these things. Make him do his job!

[HHM]

Pa...we don't really know what this attorney told the OP about reaffirmations, so lets be careful about calling them negligent. Actually, if we want to parse negligence, given the way the new BK law is written, attorneys are probably more negligent if they tell them not to reaffirm.

In any event...even here, we have to qualify the advice about not reaffirming by saying there is "some" risk to not reaffirming. The attorney's job is to tell you the "legal" consequences of reaffirmation...it is NOT the attorney's job to advise you about the practical consequenses.

[Teddy]

The $126 cost would be to re-do the paperwork stating that I am not wanting to reaffirm. I wanted to do this before my 341.

I have not paid any payments on the stove yet b/c it was on a 1 year no interest/payment plan and I was going to use my stimulus check to pay it.

My attorney, well, I almost have to agree with Pakettle - he didn't explain everything in a detailed, clear manner to me. He pretty much said I should reaffirm the stove so it's not construed as fraud, and said that if I was going to keep the house & car, I should reaaffirm them. He didn't really get into why I shouldn't reaffirm them.

He knows I'm 6k upside down on my car. I got the impression that he recommends reaffirming.

So, what are the legal consequences of reaffirming? I have NOT signed anything to reaffirm, only my intent in the initial filing paperworks.

Husband wondered this - say I didn't reaffirm on the house/car - could the creditor wait until I was almost paying them down then take them away?

JollyGreen - so if I haven't signed reaffirmation papers, I don't need to reopen my case paperwork and change my intent? Can I simply change my mind? The atty said if I change my mind, the paperwork needs changed.

[JollyGG]

JollyGreen - so if I haven't signed reaffirmation papers, I don't need to reopen my case paperwork and change my intent? Can I simply change my mind? The atty said if I change my mind, the paperwork needs changed.

Yes, just saying you changed your mind and do not want to sign the reafirmation paperwork is sufficient. You should not have to change your BK petition.

I am not a lawyer and do not know all the details of your case so be sure to consider my advise in that light. According to changes in the BK law in 2005 you know officially only have three choices in regards to secured property, you may surender it, reafirm it, or redeam it. Under older bankruptcy law you had a fourth option called a ride through. It sounds to me like you are planning to attempt an unoffical ride-thru. Many people have sucessfully done so. Basically it costs money to reposess a vehicle. Plus your lender does not want your vehicle (or whatever) they want your money. Therefore as long as you continue to pay you will generally keep your property.

As for the stove I personally would tell them to come and get it. It is extremely doubtful that they will do so. Resale on a year old, used stove is not exactly worth the cost of the movers.

Could your lender come back when the vehicle is almost paid for and demand the vehicle? Well some states laws protect you. You would have to research your particular state for the answer there. I suppose if state law doesn't protect you it is possible. It is unlikely, but possible it could happen. However, no one here has had anything like that happen to them that I can recall. Plus you would have a fairly strong case on your side to fight the efforts if it came down to it.

To tell you the truth we reafirmed both our car and our house. Our house had only been purchased a year before we filed and we had a very favorable interest rate. Our car was almost paid off (we finished paying it off a month after discharge).

Most people, as practical advise (not legal advise) don't recomend reafirming anything you are upside down on or have unfavorable terms on unless the lender willing to renegotiate your terms to get a reafirmation (unlikely in a mortgage, have seen it done on a vehicle).

[Teddy]

Thanks JollyGG - I am getting that impression here the more I read.

HHM told me in another post that I seem to have a cheap (get what I paid for) attorney and I'm afraid he/she is right. I am finding out so much here and it makes me have more questions.

My car is thru a Credit Union so perhaps they could force me to reaffirm - from what I've read they are tougher. Which would be ok I suppose, I do like my car.

I've only had my house 2-1/2 years and would not profit from selling it - my attorney said to let it go if I wanted, but I think the place we wanted to move to fell thru so now I'm just still thinking why reaffirm? I'm not seeing a real benefit to me.

I'm just really confused - maybe I should call the attorney Monday and just have a talk with him. I feel like I'm bothering him which is not the attitude I should take since I have paid him $700. He should be there to answer my questions. Maybe I'm at fault for not calling him more.

I don't think they'd come get the stove either - it's not a year old - only a month old, but it was a cheap stove and I don't think they'd mess with it.

So a ride-thru is from the old laws, I keep seeing it referred to here. But yes, that's what I'm thinking might be in my best interest.

Thanks for the advice on me possibly not having to pay $$ to change my paperwork. That's good to know.

the paralegal at the attorney said that many creditors won't play that game of not reaffirming, but she did agree that with the economy the way it is, they probably would not force the reaffirmation.

I guess I am wondering what GOOD reaffirming would do me?

[2confused]

From what I understand, reaffirming will help reestablish your credit. Perhaps not as much as starting over with a new loan. I've decided to reaffirm my auto loan with a credit union. After calling many dealers and getting a realistic number for payment, plus balance after tax,title,etc...I'm looking much better than i originally thought. Not to mention, I can stay with my union this way. In this day and age, I feel that reaffirming your mortgage is like shooting yourself in the foot, but that is just my opinion. (and depends on your circumstance)

[CindyLou]

I woud not rraffirm any of those things. That is just my opinion. However, the credit union will not probably allow a ride through.

As far as the stove. Don't tell them anything. Just do nothing.

The house....it will be fine with a ride through.

Good luck!

[Boscoe]

Ok, here is my experience with reaffirmations:

I would only do them if you intend to keep the asset (house or car) and want to and need the creditor to continue reporting your payments to the Credit Bureaus. Most of the time, if you do not reaffirm, the creditor will stop reporting.

In my situation, the bank I have my mtg loan with never sent a reaffirmation agreement so I did not sign it prior to my discharge. As a result, they informed me that they would no longer report payments to the credit bureaus and updated my credit reports to show that the account was closed.

On the negative side, I won't have that payment history reporting anymore and will lose the item on my credit report in 2017.

But....on the positive side, I no longer legally owe anything on my mortgages on the house. Now, to stay here, I must keep on paying, but if things went completely south in the future, I could hand over the keys and simply walk away.

So, my recommendation is to reaffirm if you want the credit reporting and do not reaffirm if you don't.

Given the present state of the economy, if you continue to make your payments, no one is coming to take your house or your car. Just doesn't make sense for the creditor to waste their time on loans that ARE performing, when there are plenty that are not.

[HHM]

Ok, here is my experience with reaffirmations:

I would only do them if you intend to keep the asset (house or car) and want to and need the creditor to continue reporting your payments to the Credit Bureaus. Most of the time, if you do not reaffirm, the creditor will stop reporting.

In my situation, the bank I have my mtg loan with never sent a reaffirmation agreement so I did not sign it prior to my discharge. As a result, they informed me that they would no longer report payments to the credit bureaus and updated my credit reports to show that the account was closed.

On the negative side, I won't have that payment history reporting anymore and will lose the item on my credit report in 2017.

But....on the positive side, I no longer legally owe anything on my mortgages on the house. Now, to stay here, I must keep on paying, but if things went completely south in the future, I could hand over the keys and simply walk away.

So, my recommendation is to reaffirm if you want the credit reporting and do not reaffirm if you don't.

Given the present state of the economy, if you continue to make your payments, no one is coming to take your house or your car. Just doesn't make sense for the creditor to waste their time on loans that ARE performing, when there are plenty that are not.

Problem is, even if you reaffirm, there is no guarantee the lender will report positive payment history. Many members on this board reaffirmed with that same idea only to find out out their bank was still not reporting payment history after reaffirmation.

Unless the reaffirmation agreement SPECIFICALLY addresses the issue of credit reporting, DO NOT ASSUME your lender will report post BK payment history or account information.

[Teddy]

Ok, I understand everything now. thanks for your input.

I wonder if my attorney advised me to reaffirm to build my score back up. My husband has no credit score and I don't want to end up in that boat. He has some medical collections showing up but no score and he can't get a credit card. He could probably get one of those where you put your own money into it I suppose.

[JollyGG]

From what I understand, reaffirming will help reestablish your credit. Perhaps not as much as starting over with a new loan. I've decided to reaffirm my auto loan with a credit union. After calling many dealers and getting a realistic number for payment, plus balance after tax,title,etc...I'm looking much better than i originally thought. Not to mention, I can stay with my union this way. In this day and age, I feel that reaffirming your mortgage is like shooting yourself in the foot, but that is just my opinion. (and depends on your circumstance)

Be sure to have it spelled out in the reafirmation that they report to the credit agencies. Many will not even if you reafirm unless it is spelled out in the reafirmation.

[danaf]

I called the credit union where I have my car loan (anonomously) and asked them about what would happen to someone's car loan account & bk. They said that they would 'require' a reaffirmation on the car loan to keep the car. I find it really hard to believe they would repo a car that the payments are up to date on and were never late. Aside from the threat, I'm still going to attempt a ride-through. I'm upside down on the loan and one never knows what will happen in the future. If they really try to push it - I'll try to negotiate a lower rate & definately insist on them putting that they will report favorably to the credit bureaus on paper.