Owe LESS than car is worth....Reaffirm?

[killinstinct]

Anyone? We have a nice car that is more than covered though exemptions (we have the ability to utilize federal exemptions and we are surrendering our house). Should I re-affirm? I know in most cases it would be best not to, but we actually owe less than it is worth by about $5000, and it is certainly reliable transportation I'd rather not do without....

[brokeasajoke]

I'm reaffirming my vehicle. Same situation, I owe about 5,000. The car is worth 9,000 or so. We'll have it paid off in about 1 year.

My lawyer recommended reaffirmation for what it's worth.

[killinstinct]

Thanks brokeasajoke. I was afraid of that. My lawyer hasn't said anything, but I noticed it will cost extra $$$$ for reaffirmation agreements. I had better just plan on it and contact my lender on Monday. Good luck to you as well! We appear to be on a similar timeline.....

[brokeasajoke]

What did your filing papers read under statement of intentions?

Mine said "intends to stay current and retain"

Then my lawyer (without my prodding) amended it to "intends to reaffirm loan and retain"

From what I've seen around here, most folks whether they state they intend to reaffirm or not just continue paying and don't reaffirm. I would check your petition and ask the lawyer from there...

[killinstinct]

Mine states that we "indend to reaffirm the debt". I'm just concerned that they can and would repo the car as there's some equity in it. I'm going to have to hash out at least another $250 for my lawyer to review a reaffirmation agreement.

[killinstinct]

BTW I'm current on the loan...just letting cards and house go....

[LuciluS]

Mine states that we "indend to reaffirm the debt". I'm just concerned that they can and would repo the car as there's some equity in it. I'm going to have to hash out at least another $250 for my lawyer to review a reaffirmation agreement.

I agree if you have equity in the car, able to exempt it in your Chapter 7, can afford the car payments, Reaffirmation is the way to go. Gives you peace of mind..no worries about possible repo. Sorry you are going to have to pay $250to your Attorney. Makes you wish you had found this forum first huh? LOL!

We were fortunate in that our Attorney's Contract includes 2 reaffirmations and know we are reaffirming our home as we just bought it 12/20/07. Our area in AR was not hit as hard in the Market Value drops like a lot of other States and we could possibly have a tad bit of equity in it. Not sure yet, as we will be filing in Sept.

Possible maybe your Attorney might let you pay the $250 in installments? Guess it wouldn't hurt to ask, if you haven't already.

Good Luck

Luci

[brokeasajoke]

I included the reaffirmation of the vehicle in my initial fees. It was a peace of mind thingy for me. Also, I don't want to mess with another credit card so I figure this will be a better option to at least get some positive stuff on my CR past bankruptcy.

I would pay the 250.00 if it were me though. That's just me. In the long run, I think it would be worth it...

[killinstinct]

Thanks for your thoughs guys. People seem to bash reaffirmation left and right on the forum, but I think in our case we'll need to do it, just to be safe.

[OhioFiler]

Thanks for your thoughs guys. People seem to bash reaffirmation left and right on the forum, but I think in our case we'll need to do it, just to be safe.

The risk of losing your car post-BK without reaffirming is near zero if you maintain the payments. Why would you want to assume a debt post-BK that you aren't required to assume? that debt is discharged in the bK. If the only reason is "just to be safe", I think it's a mistake.

[LSUTiger32]

I am going to agree with OhioFiler. If they make you well then that is a different story because you need to keep it. If it is good reliable transportation and it's worth more than you owe it's kind of a no brainer. However, if they don't force re-affirmation and you can continue to pay and stay current then there is no reason to. That way if things change and you do default for some reason you have no liability. It sounds like it might not be an issue either way but I wouldn't re-affirm unless they force you to.

[jribe]

Anyone? We have a nice car that is more than covered though exemptions (we have the ability to utilize federal exemptions and we are surrendering our house). Should I re-affirm? I know in most cases it would be best not to, but we actually owe less than it is worth by about $5000, and it is certainly reliable transportation I'd rather not do without....

if you like your car; and you're not upside down, keep it! Most people let their cars go for a couple of reasons: the payment is too high, the vehicle isn't right for their family any more, they owe much more than it's worth, it needs expensive repairs, and/or they can find a better deal..

It sounds like you have a reliable car that you are comfortable with, and can afford the payments - and don't owe a lot on it. All positive things!

[killinstinct]

Thanks for your perspective Ohiofiler. It is just a car, and I know that we'd have no liability for it if things got worse and we had to let it go as well (although it does hold some sentimental value, both the wife and I are kind of car nuts and it's a pretty nice Charger).

Looking at it from a bank's perspective though, if there was equity and they had the right to repo it and sell it at a profit, there is $$$$ to be made, right? Why wouldn't they repo it? And if you pay it off, will you have any problems getting the title? I would hope they're still obligated to give it to you since you paid the loan, even if you didn't reaffirm....

This is an interesting issue, with lots of varying perspectives. This forum has been sooooooooooo much help I really appreciate everyone's input, and wish you all luck with your cases as well....

[destitute]

One other thing to remember, since you have equity your risk is low so if you found yourself in a bind in the future you should be able to sell. The main benefit of reaffirming that I didn't see mentioned above for you is that by reaffirming they should report future payments to the credit bureaus giving you new positive history going forward.

[OhioFiler]

Thanks for your perspective Ohiofiler. It is just a car, and I know that we'd have no liability for it if things got worse and we had to let it go as well (although it does hold some sentimental value, both the wife and I are kind of car nuts and it's a pretty nice Charger).

Looking at it from a bank's perspective though, if there was equity and they had the right to repo it and sell it at a profit, there is $$$$ to be made, right? Why wouldn't they repo it? And if you pay it off, will you have any problems getting the title? I would hope they're still obligated to give it to you since you paid the loan, even if you didn't reaffirm....

This is an interesting issue, with lots of varying perspectives. This forum has been sooooooooooo much help I really appreciate everyone's input, and wish you all luck with your cases as well....

It may be equity to you but the bank would have to add in the cost of the repo, the expected costs getting the car to auction and the unknown value to be received at the auction. Those items alone would probably eat up any possible "profit" for the bank. It's just not worth it for them. They are in the business of selling money not cars. They prefer to collect your payment.