Reafirm question

[MSH]

I signed my chap 7 paperwork yesterday. My lawyer told me that I shouldn't reaffirm my car....because i wasn't sure if i wanted to keep it or not. Can the loan company just take my car, do they have to wait until after the BK is over? What if i am making payments (i am consistently 1 month behind though)... can they or will they take the car?

This whole reaffirming thing confuses me a little.
Someone once told me... to not even think about it. That they would only repo it as normal (miss a few months and it is gone). What are the loan companies rules for this?

[cursedbycc]

Good question, I was wondering the same thing. The reaffirming thing confuses me as well.... Hopefully someone with some experience will chime in and educate us both

[DebtEnder]

Ding ding ding you have asked the million dollar question

The question of if ride through exist is still being argued in the courts. Ride-through being the act of not signing any documents saying you owe money but paying anyways. Thereby allowing you to keep possession of the asset but no longer financially bound by it. So you miss payment and they can get the asset but can't ask you to pay for any missing value.

So the short answer is according to initial ruling by the bankruptcy appellate court ride through does not exist and the creditor can repo the asset any time they want. However many won't as they be dumb to. Why take something when that person was giving them money to use it.

So there are no rules!!!! cats living with dogs, it's anarchy!!!

Seriously it a dumb luck thing. Best advice I can give is do a Google search of the lien holder and ride-through and see if people are getting cars taken in the night in spite of paying with no re-affirm.

[TEW]

When you file you get 3 chooses. Redeem, surrender or reaffirm.
If you redeem the car IF you can pay cash or get a loan there are some programs that allow you to do that. But the interest rate maybe high.
Surrender you give the car back. You are not responsible for any deficiency since the loan will be discharged.
Reaffirm you are basically reversing the discharge on the loan. The BK judge will need to approve this. If you have a minus number on your disposable income the judge may not approve the reaffirm. You can say you are going to reaffirm and just not sign the paper work. And ride through.
Can the lender take the car back? (Yes) Will they? Not likely the market is flooded with unsold cars. Either way you need to be current on the loan. If you are behind they may work with you. They may move that one payment to the back of the loan. Or try to get the loan current.

[laurannm]

Again though, state repo laws take precedence and play a big part in this. In many states, regardless of whether or not you reaffirm, as long as you remain current, they CANNOT take your car.

[TEW]

Again though, state repo laws take precedence and play a big part in this. In many states, regardless of whether or not you reaffirm, as long as you remain current, they CANNOT take your car.

I would not say can not.

[relief13035]

My advice - stay FAR away from the reaffirmation papers or you could end up like me:

We are on Day 96 without a discharge, because I was STUPID and reaffirmed my car and then the judge disputed it.

[BnkrptcyLwyr]

The true answer depends on whether there has been a default in your contract.

Of course, the most common form of default is failure to make timely payments.

Another common, but little known, default, is the act of filing bankruptcy. Yep, that's right, even if you were current on all payments up to the filing of bankruptcy, the act of filing bankruptcy is a "default" if your contract contains an "ipso facto" clause (a default-on-bankruptcy clause).

If you have defaulted on your contract, then the company has the right to seek repossession.

Now, not all contracts have this clause (Drive Financial doesn't have it) ... but Ford and Chrysler credit do.

So, if you were current on all your payments, and there is no default-on-bankruptcy clause, then there is no "default" and the bank should *not* have the right to repossess - there's no default. What that would mean, is that there should be no need to reaffirm.

If there is a default-on-bankruptcy clause, then the bank *does* have a right to repossess (even if the payments are current - but it raises a good Uniform Commercial Code question about redemption under the UCC).

So the question is not if your circuit "allows" a ride through, it's really about whether your contract has a "default-on-bankruptcy" clause and whether there is a default - it's really an issue of state law and breach of contract and what you can do to cure under the Uniform Commercial Code.

There's a lot more to write on this issue ... but I'll leave it at that for now.

By the way, my $0.02 ... do NOT reaffirm on any mortgages ... the banks will take your money without the reaffirmation ... and the requirement to reaffirm, redeem, surrender applies to personal property.

[MSH]

Is it true that they cannot reposes until the BK is closed?