What is the advantage of NOT reaff your cars?

[CatsInTrouble]

...but you still want to keep them?
Does it differ between a lease and a purchase?

[keepmine]

The advantage is huge. Should you decide to give up your car later on, you will have no liability for any deficency balance.

[SubPrimeME]

So how does this work, you don't reaffirm keep making your payments, but in a year you could just turn the car in- if you don't want it anymore?

[BrokeAzzez]

We didn't re-affrim our vehicle and are not making payments. They will come and get your vehicle.

[keepmine]

So how does this work, you don't reaffirm keep making your payments, but in a year you could just turn the car in- if you don't want it anymore?

Yep, that's how it works. You can give it up at any time.

[SubPrimeME]

Yep, that's how it works. You can give it up at any time.

Nice, so why would anyone reaffirm then?!

[BrokeAzzez]

I was going to re-affirm until I realized that I was 7K upside down.....I guess if you can handle the payment and your not crazy upside down then you would?

[SubPrimeME]

I was going to re-affirm until I realized that I was 7K upside down.....I guess if you can handle the payment and your not crazy upside down then you would?

Right, but let's just say, cause this economy is super, that you lose your job and can't make the payments anymore. if you reaffirm you are screwed, but if you don't then no worries....

Am I correct in thinking this way, this seems too good to be true?! I mean- you 'll lose all the money you have made in payments, but so what?

[fltoo]

I have equity in my car and the payment is small.

I still did not reaffirm simply because it puts the lender in control.

I called the lender (one of the big car brands) and told them I would continue making payments, but was not reaffirming. They said, fine, but I would not be getting any more statements. I said, fine, I would just mail in the payments as usual. They gave me a BK dept. phone number that I could call to get monthly updates and payoff info.

They confirmed that when the car is paid off, which will be shortly, they will mail me the title.

[lrprn]

If you don't reaffirm, there are a few car lenders who will not allow you to continue making payments and still keep the car. I think that's foolish because they would make more money letting you continue to make payments compared to selling it at auction, but apparently sense doesn't have much place in today's financial situation.

A few states have a law on the books that lenders cannot repossess any asset that has on-time payments. If yours is one of them, then as long as you keep your payments on time, you can keep the car and not reaffirm.

Your lawyer will know if it's safe for you to not reaffirm. Chances are you won't have to, especially since the lenders don't want more cars and houses on their books to try to sell in a horrible economic climate.

[Tromploi]

I just got a letter from Toyota stating that if I don't reaffirm within 45 days of the 341 meeting, pay and retain is no longer an option. I have probably 10K equity in it, could be why?? I will probably reaffirm it, even though I hadn't planned on it. My payment is fairly low.

[TEW]

Right, but let's just say, cause this economy is super, that you lose your job and can't make the payments anymore. if you reaffirm you are screwed, but if you don't then no worries....

Am I correct in thinking this way, this seems too good to be true?! I mean- you 'll lose all the money you have made in payments, but so what?

You are correct I don't know of any upside to a reaffirm only down sides. The thing is when you file you have three choices surrender, redeem or reaffirm. So people that check reaffirm sign the paper work and go through the process. A reaffirm has to be approved by the judge. Something I found out in a post the other day was that if the judge denies the reaffirm and they do. You maybe forced to surrender the car.

[Tbornetun]

Check into the laws in your state to make sure, they could just be strong arming you into signing that reaff. I would double check the laws in your state before signing.

[TEW]

I just got a letter from Toyota stating that if I don't reaffirm within 45 days of the 341 meeting, pay and retain is no longer an option. I have probably 10K equity in it, could be why?? I will probably reaffirm it, even though I hadn't planned on it. My payment is fairly low.

10K equity? what is the state exemption for a car in your state?

[SubPrimeME]

Ok...

One other question, Sorry OP for hijacking your thread, I co-signed on my sister's car, because at the time I had the credit(LOL), but I didn't sign the reaffirm for her car. My atty said that that credit line will come off my credit report, is this true? She is still obligated, but does not signing the reaffirm remove me from this obligation?