should I reaffirm or ride through.

[bigtim6656]

I am in Indiana. I traded my truck in a month ago end up with a 10k+ loan. just under 11k i think. I will be filing in July maybe June. If my payments are upt o date never late when I file should I reaffirm or ride through. Can the laon company make me reaffirm if I am up to date or is it my choice. As what are the pros and cons to each. I got the loan to fix my credit If I ride through will that cause the payment history not to go on my credit thus doing no good to my rating. payment is not a issue. Half my income is SSDI and the other half is Education benefits for going to college. so the chances of me losing my income ore slim to none. So should I reaffrim it will that help my credit?

[rjones04]

I am in Indiana. I traded my truck in a month ago end up with a 10k+ loan. just under 11k i think. I will be filing in July maybe June. If my payments are upt o date never late when I file should I reaffirm or ride through. Can the laon company make me reaffirm if I am up to date or is it my choice. As what are the pros and cons to each. I got the loan to fix my credit If I ride through will that cause the payment history not to go on my credit thus doing no good to my rating. payment is not a issue. Half my income is SSDI and the other half is Education benefits for going to college. so the chances of me losing my income ore slim to none. So should I reaffirm it will that help my credit?

well, honestly its a personal preference BUT...
ride through- after you file, you run the risk of the loan company repoing the vehicle since you filed BK despite perfect payment history etc. honestly a lot of companies will not collect vehicle if you are current, but depends on the creditor, their procedures on the customer when filing. Its honestly a roll of the dice

affirmation: you are legally tying yourself to the debt. They cannot repo your vehicle despite filing BK. Flip side, if you decide to quit paying i.e. job loss you are still legally responsible for payment. Yes, they can still repoe the vehicle since u quit paying, but the company will personally hold u liable (i.e. judgment on amount owed because you signed a legal agreement to pay the loan until the end. no, cant bk again because you already filed with affirmation and will be stuck paying the loan come hell or high water!

Its your call, but many will ride the loan thru because if you experience financial loss or vehicle becomes less than u owe, you can have the creditor take the vehicle and u will not legally owe a dime cuz u signed no affirmation and filed BK that would protect you from them coming after you.

[bigtim6656]

So I might need to call them and see what they have to say before I file. If I file with perfect payment history and reaffirm can the repo and not take a reaffirm. Where does it say in the contract they could do that/

well, honestly its a personal preference BUT...
ride through- after you file, you run the risk of the loan company repoing the vehicle since you filed BK despite perfect payment history etc. honestly a lot of companies will not collect vehicle if you are current, but depends on the creditor, their procedures on the customer when filing. Its honestly a roll of the dice

affirmation: you are legally tying yourself to the debt. They cannot repo your vehicle despite filing BK. Flip side, if you decide to quit paying i.e. job loss you are still legally responsible for payment. Yes, they can still repoe the vehicle since u quit paying, but the company will personally hold u liable (i.e. judgment on amount owed because you signed a legal agreement to pay the loan until the end. no, cant bk again because you already filed with affirmation and will be stuck paying the loan come hell or high water!

Its your call, but many will ride the loan thru because if you experience financial loss or vehicle becomes less than u owe, you can have the creditor take the vehicle and u will not legally owe a dime cuz u signed no affirmation and filed BK that would protect you from them coming after you.

[rjones04]

im not understanding your question. Are you asking can they repo you if you stay current and not sign an affirmation? is that your questioN?

[bigtim6656]

Ya if I ride through and do not do a reaffirm can they repo it if i am current when I file and stay current.

im not understanding your question. Are you asking can they repo you if you stay current and not sign an affirmation? is that your questioN?

[rjones04]

Dude, that is the part i was talking about with the roll of the dice. You run that risk with ride through. I mean many companies will not bother you since you are current despite filing, but other companies dont care if you are current. Their rationale is he filed BK repo his vehicle. Its a business move an auto loan creditor can do legally if you "ride the loan through and legally you cannot prevent it despite being current. However, if you reaffirm they cannot legally repo long as you are current. Does this answer your question?

FYI reaffirmation on auto loans came out with the new bankruptcy laws a couple years ago. People would abuse BK buying a new car, then drive the car a few months or years then say heck with it. Legally, they were not tied to the debt. Now you are supposed but not obligated to reaffirm an autoloan debt. Also, many lenders (i.e. Suntrust told me if the loan is not reaffirmed, they will not continue reporting positive payment history because you rode the loan out and the notation on the credit report will state "included in BK" and not listed as paid as agrees/current. In return, paying current keeping the car with the ride through method will not reflect positive payment history for car loan because the vehicle loan was included in bk compared to an reaffirmation which results in positive history notated on the cr report.

Again, each company varies. ITs a spin of the dice. FOr example (this is only hypothetical i dont know the procedures of these two companies), you ride through a loan with CHase, they might say great he filed Bk and is current wont repo, but Bank of America might say ok he filed bk repo his car although u paid the entire time with perfect payment history. Its a spin of the dice, but many people on this forum advice against reaffirmation because if u decide not to keep the vehicle, legally you will not be tied to the debt. If you reaffirm, you will be tied to the debt regardless although u filed bk. My rationale, if it is a new car that u plan to keep for years, sign the papers and you wont have to worry about them coming after your car. If you dont mind spinning the ball, dont sign reaffirmation and u wont legally be tied to the debt if you decide to stop paying. Also, i would advise against asking your lender about filing with your name!!!!! THat is a big nono. They will already know/have an idea you are going to file and might try to come after the vehicle if u ride through. Sorry for being so wordy. Does this clear up your question?

[bigtim6656]

Ya that anwers my question thanks. Guess it is a reaffirm. No reason to have gotten it if it ant going to go on my credit. Atleast I know there will be no taking it if I reaffirm. I have no plan on not paying it. my hope is ride it for a year pay it off and trade it in for a new jeep and a lower rate. Or pay it off and get my motorcycle then. lol
As I will need something to fix my credit and a CC is out due to my income being except with or without bk.

Dude, that is the part i was talking about with the roll of the dice. You run that risk with ride through. I mean many companies will not bother you since you are current despite filing, but other companies dont care if you are current. Their rationale is he filed BK repo his vehicle. Its a business move an auto loan creditor can do legally if you "ride the loan through and legally you cannot prevent it despite being current. However, if you reaffirm they cannot legally repo long as you are current. Does this answer your question?

FYI reaffirmation on auto loans came out with the new bankruptcy laws a couple years ago. People would abuse BK buying a new car, then drive the car a few months or years then say heck with it. Legally, they were not tied to the debt. Now you are supposed but not obligated to reaffirm an autoloan debt. Also, many lenders (i.e. Suntrust told me if the loan is not reaffirmed, they will not continue reporting positive payment history because you rode the loan out and the notation on the credit report will state "included in BK" and not listed as paid as agrees/current. In return, paying current keeping the car with the ride through method will not reflect positive payment history for car loan because the vehicle loan was included in bk compared to an reaffirmation which results in positive history notated on the cr report.

Again, each company varies. ITs a spin of the dice. FOr example, you ride through a loan with CHase, they might say great he filed Bk and is current wont repo, but Bank of America might say ok he filed bk repo his car although u paid the entire time with perfect payment history. Its a spin of the dice, but many people on this forum advice against reaffirmation because if u decide not to keep the vehicle, legally you will not be tied to the debt. If you reaffirm, you will be tied to the debt regardless although u filed bk. My rationale, if it is a new car that u plan to keep for years, sign the papers and you wont have to worry about them coming after your car. If you dont mind spinning the ball, dont sign reaffirmation and u wont legally be tied to the debt if you decide to stop paying. Also, i would advise against asking your lender about filing with your name!!!!! THat is a big nono. They will already know/have an idea you are going to file and might try to come after the vehicle if u ride through. Sorry for being so wordy. Does this clear up your question?

[rjones04]

ok but i dont understand.... if you are not planning to keep the vehicle long term, why reaffirm? I mean i know u want the credit reporting, but once u get the new vehicle loan from trading it in, you will get a new autotrade line. Plus, whether you reaffirm or rideout when u trade vehicle in, your credit will still reflect BK on it so rates probably wont be 3-5% unless u are very lucky. Be prepared for this. Many on here get approved 8-25%. This is a serious financial move and yes time will pass where you will be approved again, but expect denials/high interest rates etc. BK is credit hell initially until time passes. ALso, if you wanna re-establish many get cap one
,hooters, premier bank, etc. accounts days to months from the discharge. These accounts will be granted with low credit line but will help in re-establishing your credit.

[bigtim6656]

I have no proplem keeping it. I have about 10k in equity in it. Cause they paid off a title loan I had so if i give it up I loose almost 10k. Thats why I want to keep it. Plus I might just keep it and get a car with a better mpg.

ok but i dont understand.... if you are not planning to keep the vehicle long term, why reaffirm? I mean i know u want the credit reporting, but once u get the new vehicle loan from trading it in, you will get a new autotrade line. Plus, whether you reaffirm or rideout when u trade vehicle in, your credit will still reflect BK on it so rates probably wont be 3-5% unless u are very lucky. Be prepared for this. Many on here get approved 8-25%. This is a serious financial move and yes time will pass where you will be approved again, but expect denials/high interest rates etc. BK is credit hell initially until time passes. ALso, if you wanna re-establish many get cap one
,hooters, premier bank, etc. accounts days to months from the discharge. These accounts will be granted with low credit line but will help in re-establishing your credit.

[rjones04]

you have 10K equity in the autoloan now???? Please be careful and i would consult an attorney early just for consultation with questions. Each state varies, but there is a cap on the equity by law. If you have too much equity, this can open a can of worms with the trustee. i.e. buying a car with a loan considerably lower than the worth of the car, having a house way above market value which equates to high equity with the trustee scratching his head thinking this person is having financial difficulties needing to file BK or is filing BK fraud to get over. Do you follow me?

[aljohnson007]

Something else to consider. If you have low income, an attorney most likely will not sign off on a reaffirm agreement and then you would have to go before the bk judge for approval.

[bigtim6656]

It is complicated. If you look at the fact I got 2k more then I paid for my truck. They paid the loan off I had that was 1500 so I was up 3500. The loan I have on the jeep is just over 10k but the the low value of the truck is about 15 to 17k right now. I was told this summer it would be around 14 cause it being summer and I guess no one buys 4x4 jeeps that time of year. I think if they sold it quick they might get 10 or 12k i doubt any more. I am not sure how they can say someone getting a loan to buy a nice car and have alittle equaty from a trade is fraud. I could see it if I got the loan and filed the day before.
The att will be ok with a reaffirm before I pay him or I will find another lawyer.

you have 10K equity in the autoloan now???? Please be careful and i would consult an attorney early just for consultation with questions. Each state varies, but there is a cap on the equity by law. If you have too much equity, this can open a can of worms with the trustee. i.e. buying a car with a loan considerably lower than the worth of the car, having a house way above market value which equates to high equity with the trustee scratching his head thinking this person is having financial difficulties needing to file BK or is filing BK fraud to get over. Do you follow me?

[StartingOver08]

I think there is a little confusion on the amount of equity you actually have in your vehicle. The vehicle is only worth what a ready, willing and able buyer is willing to pay for it today.

However, the Trustee requires an estimate of value when you file. The valuation model that each of the district's require is different: some require NADA Retail (our district here in S FL), others require KBB and still others will allow you to use the Black Book valuation. You will want to make sure that you do not have too much equity in your vehicle. Make sure the valuation fits within the allowed equity exemptions - if not, then the Trustee may want the vehicle ONLY IF it is worth selling and the BK estate will net something after your exemption amounts.

As to the attorney signing your reaffirmation agreements, find out what his policy is before you sign any sort of representation agreement with him/her. Some attorney's have a policy of never signing a reaffirmation agreement. In those cases you will need to have a hearing so the judge can approve your reaffirmation. Good luck.

[bigtim6656]

I will look into that. Thanks. How could I find out what my area requires for value. I know kbb excellent retail is like 18k. but the black book and private party is like 14,000. You say you only allowed so much equity does nto mean if I owe 10k and it is worth 14k I have to use 4k out of my excemptions.

I think there is a little confusion on the amount of equity you actually have in your vehicle. The vehicle is only worth what a ready, willing and able buyer is willing to pay for it today.

However, the Trustee requires an estimate of value when you file. The valuation model that each of the district's require is different: some require NADA Retail (our district here in S FL), others require KBB and still others will allow you to use the Black Book valuation. You will want to make sure that you do not have too much equity in your vehicle. Make sure the valuation fits within the allowed equity exemptions - if not, then the Trustee may want the vehicle ONLY IF it is worth selling and the BK estate will net something after your exemption amounts.

As to the attorney signing your reaffirmation agreements, find out what his policy is before you sign any sort of representation agreement with him/her. Some attorney's have a policy of never signing a reaffirmation agreement. In those cases you will need to have a hearing so the judge can approve your reaffirmation. Good luck.

[HHM]

It's not that much of a roll of the dice. Very few car lenders are going to repo car because of failure to reaffirm. Is it a risk, sure; is it a risk you really need to factor into your decision making, NO.

Not only will most attorneys NOT sign a reaffirmation, neither will most BK judges. Many lenders tried this early on when the 2005 law was passed, to get reaff's or threaten repo but discovered very quickly it is not worth the time and effort.