reaffirming/not reaffirming a car, and lien?

[zingabot]

Hello all,

I'm feeling over-saturated right now with all the reading I've been doing, recently as it affects whether we reaffirm our car or not.

It's worth keeping as it's just over a year old, was bought new at a great discount (relative works for the company) and has an excellent warranty covering practically everything. Plus it's our only vehicle and we need something to get around in

So I need to keep this car. My options are to reaffirm, or not reaffirm and keep making the payments. I'm hoping to negotiate a lower interest rate though, and bring the principal down a bit based on the current value of the car (as in, not reaffirming for more than the car is worth). I would think that the only way I could to those two things would be to sign a reaffirmation agreement, correct? If I don't sign something, the current contract with them remains in effect (at the current interest rate and principal), right?

I guess what I'm asking is if there is any way of officially lowering the interest and principal without reaffirming the debt?

Secondly, the bank's lien on the car survives the bankruptcy, correct? Even if I don't reaffirm they still legally hold the title? So the debt would be officially wiped out in the BK, meaning I'm no longer personally responsible for the outstanding balance, but IF I want to own that car one day I MUST pay it off, right? It's not like I suddenly own the car once the debt is wiped out in the BK?

Thank you for helping me get this straight. I've found conflicting information about this and just really need to know what's what. I really don't want to sign any reaffirmation agreement (though we filed the BK papers yesterday with a SofI stating we'd reaffirm the car), but I really would like to pay a lower interest rate and adjust the principal.

[HakunaMatata]

I don't think you have much leverage in adjusting the interest rate or principle of your existing loan. If the car is newer and you purchased it at a discount, your lender won't likely be receptive to altering terms. I believe there is a poster who was able to the reduce his interest rate and extend the length of his loan through a CU; however, a principle reduction didn't occur. You may be able to work the interest rate angle; although, your lender recognizes you don't have many options. Unfortunately, for most, a recent BK doesn't place you in the best rate category.

Yes, your lender will hold the title until you pay off the loan. This will occur with or without a reaffirmation. If you reaffirm, you recommit to the loan. If you ride-through, you aren't committed to loan terms; however, you need to remain current to avoid a repo. Please be sure to verify your lender is receptive to ride-throughs. Some will not accept them.

[mhman]

It is recommended to contact your bank to find out their policy on "reaffirmation".
My auto loan is with Chase and they allow me "ride-through" and "title" after the loan is paid-off without reaffirmation. But they don't negotiate with the balance, interest rate, terms, etc.

I think it depends on the bank or credit union's policy.

Just contact the right person who is in BK department. You will get the right answer right away!

[zingabot]

Please be sure to verify your lender is receptive to ride-throughs. Some will not accept them.

In our state they can't repo if we're current on our payments. So even if they're not receptive to ride-throughs, they can't come get the car if I don't reaffirm. Or am I missing something?

Here's the thing though. You would think they much prefer to receive cash every month from us rather than coming to get the car, selling it at auction, and taking a loss on it. It's in their best interest for me to reaffirm - so wouldn't that make them more willing to negotiate?

[OutofTime]

sorry but being new to this as well and have similar question, what is a ride through?

[aces67]

Some states have laws that prevent a vehicle from being repoed if the payments remain current. So a Ride Through is where you don't reaffirm you just continue to make payments on time every month. You aren't legally liable for the debt so if you ever want to give it back and walk away you can with no strings attached.

If you reaffirm then your completely liable again.

Some finance companies will say no to a Ride Through but at the same time they may not be legally permitted to repo your car as long as you stay current.