Can a reaffirmation agreement be denied?

[downwardspiral]

My husband is worried the bank will repo our cars. We are up to date on payments, actually we've never paid late, and we intend to reaffirm. He's nervous they won't want to reafffirm and they'll come for the cars. Can that happen?

[BKParalegal]

A bank/lender is not the one to deny the reaffirmation. They are the ones who draft and request it. A reaff is a contract that states you are reaggreeing(is that a word) to a debt post-petition(post filing of your bk). There are two people who can deny it. You, by not signing or agreeing to it, and the judge, if he deems the debt will cause undue hardship. The second is partly based on if your income and expenses in Schedule I and J are really upside down, meaning you are negative a big chunk a change every month. The judge will want to know how you are going to pay the bill every month. For the most part and without getting into the politics if it wise or necessary to sign a reaff agreement, they generally get approved by the judge.

Good Luck

[HHM]

In the sense that if the lender does not file the reaffirmation, that would be a defacto denial.

If the debtor is willing to reaffirm, nearly any lender will accommodate it. But I have heard on a few occasions where the lender failed to file the reaffirmation in time. But at the same time, the lender did NOT come get the property.

Now, if you are not current on your payments, a lender may refuse to enter into a reaffirmation.

But BKPara is right, if the lender wants the reaffirmation, there are only 2 people that can deny it, you, and the judge. But even if the judge denies the reaffirmation, that does not necessarily mean the bank will come get the property if you keep making the payments.

[Michigan1951]

Is it my understanding from reading other post replies about this same issue of the reaff being denied or not, by whom? If you have a lawyer that signs the certification stating that he approves the reaff and the box is checked to show no undue hardship present, then that makes the reaff now active on the docket once posted. But, if you don't have a lawyer, then you have to go before the judge to get HIS approval.

[NoMoreCards]

My lawyer stated from the get-go that he does not sign and approve any reaffirmations. So there are times that even with a lawyer you have to have it approved by the court. My court hearing is November 18th.

But I am only a co-signer on the car, so I am hoping it is approved. It is my daughters car and she has made every payment. Hopefully, the judge will just sign it and be done with it. But it is my understanding that the judge does not always approve.

[Michigan1951]

Good luck to you on 11/18!! All this Bk stuff is taking it's toll on me..........

[justbroke]

But it is my understanding that the judge does not always approve.

Right. Some Judges refuse to approve them as well and proudly state that they are doing the Debtor a favor. If you are paying on time and your State doesn't allow repossession unless you are in material default (not constructive default by just filing Bankruptcy), then the Judge probably won't sign it, because that's the so-called ride-through.

This is actually a good thing (if your State allows rid-throughs). You basically are absolved from owing any money. Just keep paying and they won't come get the car!

[whipster1]

Actually each party must approve. It is a "new" contract and sometimes the creditor decides not to play ball. If you notice on the form the creditor must sign their "acceptance". If you are current and show the income to pay, it is unlikely that they will say no.

[aces67]

It may be denied by your lawyer or the judge. For us our lawyer is fine with doing them as long as the payment won't cause an undue hardship as he puts it- in other words if you have the money in your budget to pay the bill then it's fine but if your budget is close he won't do it.

[HakunaMatata]

My brother-in-law's auto reaffirmations were denied by his lender. Not surprisingly, the lender was a credit union (that was seemingly disappointed my BIL didn't reaffirm credit card debt). My BIL was current on the vehicle loans, not grossly upside down, had satisfactory income, and his reaffs were signed by his attorney. He was able secure auto loans during active BK and set up a voluntary repo with the CU. From my understanding, this is an uncommon scenario.