Honda Financial any experiences

[FreshStart01]

I have a 48 mo lease (4 mos into it)with Honda Financial that I'd like to do a ride through with in my BK7,I'm current on payments. Anybody have any experience with Honda Financial?

[jribe]

I have a 48 mo lease (4 mos into it)with Honda Financial that I'd like to do a ride through with in my BK7,I'm current on payments. Anybody have any experience with Honda Financial?

i've read here before that Honda doesn't do ride through's. Remembering that their values hold up well; i don't see why they would actually. They could repo the car and get the same or sometimes more than you owe by selling it to someone else.

I have a 2006 accord and i'm planning on reaffirming. It's a great car- no problems and the values hold.

[lrprn]

I have a 48 mo lease (4 mos into it)with Honda Financial that I'd like to do a ride through with in my BK7,I'm current on payments. Anybody have any experience with Honda Financial?

If you are filing with a lawyer, he/she can tell you what's happened to other filers in your area with Honda financing.

If you are filing on your own without a lawyer, then understand that you are taking a risk if you don't sign a reaffirmation and taking a risk if you do.

If you don't sign a reaffirmation but keep making on-time payments (the so-called 'ride through'), then the risk is if Honda does choose to push the issue, they do have the legal right to repossess the car. However, most car lenders would far rather get your monthly payment than repossess the car (costs them at least $1K to do that) and then they have to try to sell it again in a terrible market. They would get peanuts for it at auction. That's why even though the current bk law states you have to reaffirm, redeem, or surrender, the ride-through remains alive and well for the large majority of folks who don't sign to reaffirm.

The risk if you do sign to reaffirm is that if anything financially bad happens to you after you file and you can't make the car payments, then you'll definitely lose the car and still owe the full loan amount to the lender. You'll be saddled paying off a car in full that you no longer have. And you will have filed bk so you can't get rid of the debt by filing Ch 7 for eight more years.

Only you can decide which is the lesser risk for you and your family. Knowing what's happened to others with Honda financing in your local area will be a big help deciding which is best in your situation.

[veggirl]

im sorry but what exactly is a ride through?

[lrprn]

im sorry but what exactly is a ride through?

Before the current bk law went into effect in Oct 2005, the old bk law allowed filers to keep their secured assets as long as they made on-time payments after filing. This was called a "ride through". The asset debt was discharged but the filer kept the asset as long as they made on-time payments. If the filer couldn't keep up with the payments after filing, the creditor repossessed the asset. Simple, easy, and everyone was consistent because the bk law at that time was clear.

Then Congress (with significant monetary persuasion by secured asset creditors) wrote into the new bk law passed in 2005 that the ride-through would no longer be allowed. Filers had only three choices about what they could do with secured assets when they filed - they could sign to reaffirm the debt, they could redeem the debt (too complicated to go into here - it's rarely used), or they could surrender the asset - that was it. The goal was to ensure that secured creditors were paid their loans back in full if the filer kept the asset, no matter what happened after filing.

However, practicality stepped in after the new law went into effect in Oct 2005. Even if a filer does not sign to reaffirm the debt, business being what it is, lenders like being paid more than having the repossessed asset on their books. Over the long run, creditors found they tend to make more money allowing filers to continue on-time payments for the asset rather than repossessing it. Profit over the law - and very ironic since it was the secured creditors who wanted the ride-through to stop and lobbied for it aggressively.

So where does the ride-through stand now? It's a mixed bag. There's no consensus between the bk districts about whether the ride-through is ok or not (although In re Caraballo Case No. 07-32469 (D. Conn. 2008) indicates that ride-throughs on mortgages are ok in the 2nd district - see http://www.newyorkbankruptcylitigati...rcuit-kind-of/ ).

Bottom line is that ride-throughs remain an evolving part of the very badly written 2005 BAPCPA law. Every filer needs sound legal advice based on state law, bk case law decisions, and current local court and creditor practices to know whether reaffirming your secured assets is in your best interests or not.

[veggirl]

so what exactly is reaffirming then? arent you just continuing to make on time payments? like in a ride through
thanks

[jribe]

so what exactly is reaffirming then? arent you just continuing to make on time payments? like in a ride through
thanks

no- when you reaffirm you are "re affirming" that you will be wholly responsible for the car- no matter what. You must make your payments- if you do not; two things happen: 1. the car will be repoed 2. The car will be sold and you will be liable for the deficiency (amount left after value from sale).

If you hadn't reaffirmed and this happened (ride through) they would repo the car- but because there was no reaffirmation agreement you wouldn't be liable for the deficiency.

Most people need a car either way; so if you have a good car, in good condition and you don't owe a lot more than it's worth- reaffirm.

[veggirl]

What happens, God forbid, you are in an accident, and the car is totalled?

[jribe]

What happens, God forbid, you are in an accident, and the car is totalled?

hopefully you have insurance!

If you didn't reaffirm- i suppose you could still "walk away" but i don't know the recourse with the accident. If it were determined you were "at fault" i suppose there would be something they could go after you for- not sure

If you did reaffirm- and say the insurarance didn't cover the amount owed on the vehicle- you'll be liable for the difference.

It's the same scenario i gave you before- hence talking about if "anything" happens and you can't pay..

[mike258]

In some states, a lender cannot reposess a vehicle if you are current on payments, even if you file for bk.

Here in MA, the only way a lender can reposess is if you are behind on payments or if you do something to serious devalue the vehicle (and filing bk does not devalue the vehicle).

So I will not be signing any reaffirmation agreements and there is nothing the lender can do about it (as long as I remain current).

[liz417]

Yes, one of my vehicles is with Honda Financial and I'm doing a "ride-through" with them. My attorney told me that both Ford and GMC tend to reposses if you do NOT reaffirm the loan (even if current).

[maungoo]