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    #1

    Bankruptcy and auto

    I have just filed a chapter 7 and live in a district that allows you simply to re-affirm the loan by making payments. Apparently I do not have to do a reaffirmation agreement.

    I have contacted the company and was told that as long as i make the payments that everything would be fine.

    I am a little worried about this or is this normal operating procedure for companies. I assume they don`t really want the vehicle back. It is a great car and I got 2.5% financing and obviously now wouldn`t.

    The financing is through the arm of a major auto corp. They seem to be honoralbe folks.

    I am worried that I could pay on this car for a few years and they could simply re-possess the vehicle for no reason. ON the other hand I like not re-affirming because it allows to walk away from the vehicle if needed.


    Help and thanks
    Tags: None
    #2
    Originally posted by down @ out
    I have just filed a chapter 7 and live in a district that allows you simply to re-affirm the loan by making payments. Apparently I do not have to do a reaffirmation agreement.

    I have contacted the company and was told that as long as i make the payments that everything would be fine.

    I am worried that I could pay on this car for a few years and they could simply re-possess the vehicle for no reason. ON the other hand I like not re-affirming because it allows to walk away from the vehicle if needed.


    Help and thanks

    As far as I know (Which is limited also) is that as long as the payments are current, the loan company would have no reason to repo the vehicle.

    Not that I've ever heard of such, but not surprised if it has happened before.

    Comment

      #3
      Keep excellent records of your payments, always make certain the payment is there ahead of the due date.

      You could contact them and ask if you can give them written notice to resume sending you statements, which would NOT overturn the BK protection.
      Most of my information is from personal experience or HOURS and HOURS of online research. When you're searching online, keep in mind there is no guarantee that the info is completely up to date, and your situation is unique from anyone else's. Do your homework, and consult with an attorney so you can make an informed decision.

      Comment

        #4
        Re-affirming does mean that you will be bound by the remaining terms of the contract. BUT, so is the lender. If you do not re-affirm, they will prob. stop sending you notices, payment books and/or coupons. They can repossess or change the terms if you are 1 day late. (At least that is my understanding)
        I have a car w/ GMAC. 5 years at 0%. I am just about to make my 28th payt. (2 yrs. and 4 payts. down...2 years and 8 payts. to go.)
        There is no way that I would not want to re-affirm this loan. Car is upside down according to KBB trade-in value, but right at real value. I want to keep this 0% and I want it on my credit report. I have never been late and I want that and the int. rate to show. It will help me to re-establish credit. (I have been told that if you have a car repossessed that it is more difficult to get the next car loan or lease.) No offense intended to anyone who has had to give up a car or were so upside down on it, that it made no sense to keep...just passing along what I read.
        I did read on one of the posts that GMAC did send a rep to a person's 341 meeting, but they just met with them and signed the re-affirmation paperwork.
        Don't know if that helps any, but it is all that I can think of right now. Art
        P.S. My 341 is not until 12/8/05, so I prob. won't know how it's handled from personal experience until then.

        Comment

          #5
          I would highly encourage you to investigate this...

          I did not have to sign a reaffirm agree with my 1st mtg company. Curiously I signed one with my 2nd mtg and my car loan....

          I have found out that without a signed reaffirmation agreement, the company you are making payments to, does not have to report this on your credit bureau.

          In other words, they stop reporting and it shows up as Included in BK, despite the fact that you have continued to make payments.

          Once you sign an agreement, they will again continue to report that you are making payments and it will show up as POSITIVE credit on your report.

          Make sure of this! I was lazy and let it slide, now I'm finding out later and am trying to make amends... my attorney did not advise me of this.

          Comment

            #6
            In the No. Calif. San Jose court, there is a poster on the wall in the room used for 341 meetings, which says that if you sign a reafffirmation agreement you have to appear in court for the judge to approve it... or something like that... I should have copied down the exact language, but I didn't.

            Seems like they are trying to discourage the reaffirmations, which are optional here.
            I'm in N. California ... Thanks for your replies!
            10/11/05: bought www.form7.com software
            10/14/05: Filed Ch 7 BK Petition pro se skeleton
            10/27/05: Filed all schedules, etc.
            11/17/05: 341 meeting (done!)
            01/16/06: Last day to file objections
            01/18/06: Discharged, closed

            Bankruptcy LINKS

            Comment

              #7
              Originally posted by AAAArt
              Re-affirming does mean that you will be bound by the remaining terms of the contract. BUT, so is the lender. If you do not re-affirm, they will prob. stop sending you notices, payment books and/or coupons. They can repossess or change the terms if you are 1 day late. (At least that is my understanding)
              I have a car w/ GMAC. 5 years at 0%. I am just about to make my 28th payt. (2 yrs. and 4 payts. down...2 years and 8 payts. to go.)
              There is no way that I would not want to re-affirm this loan. Car is upside down according to KBB trade-in value, but right at real value. I want to keep this 0% and I want it on my credit report. I have never been late and I want that and the int. rate to show. It will help me to re-establish credit. (I have been told that if you have a car repossessed that it is more difficult to get the next car loan or lease.) No offense intended to anyone who has had to give up a car or were so upside down on it, that it made no sense to keep...just passing along what I read.
              I did read on one of the posts that GMAC did send a rep to a person's 341 meeting, but they just met with them and signed the re-affirmation paperwork.
              Don't know if that helps any, but it is all that I can think of right now. Art
              P.S. My 341 is not until 12/8/05, so I prob. won't know how it's handled from personal experience until then.

              No offense taken! This is as true as true gets! It is a nightmare to get another car loan/lease even 5 years after a bankruptcy if the car was reposessed.

              Comment

                #8
                FYI- I have had two repossessions and I got financed one week after discharge. According to the company I dealt with, they really look at your income as a factor. Just don't be surprised if you have to put some money down. Good luck.

                Comment

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