Reaffirmation issues

[lodibklaw]

Have an odd one to run past you guys

I got a call from a client (discharged 2 yrs ago).

We got a reaffirmation offer from his lender and he wanted to sign (it was a pretty good deal for him) so we did.

Sent the signed docs back to the lender (per their request) about 6-8 weeks prior to discharge. The documents they sent us did not have signature from the lender yet. There is a 'received' stamp which shows they got it at least 3 weeks prior (not sure where it was during the in between).

They did not file it w/court until 4 weeks after getting it, 1 week after discharge. But they had it well it advance.

For the last 2 years they have been taking payments but they have not been showing it on his credit report, which is causing issues with him getting a loan for a new vehicle.

Seems to me that 1) they had the signed reaffirmation at least 3 weeks prior (per their own admission) and 2) they've been taking payments for 2 years.

So it's their own fault it didn't get filed on time and they have, in essence, an implied contract by accepting payments for 2 years.

I want them to fix his credit report to show payments in full.

But I've never run across this issue before, the lenders have always filed on time and reported payments on time.

[justbroke]

Well, I don't know whether to congratulate your client or apologize. The debt was discharged. As you know, a reaffirmation must be filed with the Court prior to the discharge bar date, unless an extension is requested or a hearing on the matter is requested, prior to the bar date passing.

All you can do is beg them to update the past report and start reporting. However, they may feel that reporting it is a violation of the Permanent Discharge Injunction on collection of the debt. It's a sticky place to be.

Perhaps your client can ask the auto creditor to underwrite the loan manually and have the other lender provide payment history so you can submit it that way. You may not be able to get that tradeline back.

[lodibklaw]

It is an odd issue I agree.... the lender had the docs and did not file them on time.

I will let you know what we work out.

Arguably since he's got the 7 year bk on his record anyway this is a minimal issue but it is unusual.

[justbroke]

(Computer ate the last part of my response.)

I had added that you may be able to write a letter to the current lender and ask that the tradeline be updated to read CURRENT, PAID AS AGREED, $0 Balance (or whatever), and CLOSED. Make sure it's not IIB (Included in Bankruptcy), and make sure they report the last 24 months as "OK" (paid on time). But that's still a longshot.

Manual underwriting or going into a Credit Union and explaining, and providing the documentation, may be the best way to handle it.

[lodibklaw]

Update

Spoke with client and lender.

Lender agrees they sent us the documents on April 7th.

Lender agrees that we signed the documents on April 14th.

Lender agrees that they got it on May 2nd (not sure why it took them so long since we mailed on the 15th)

Lender agrees that they signed it on May 14th

Lender agrees that they didn't file it for another 2 weeks.

Lender agrees case discharged on the 23rd.

But they claim it is OUR fault for not getting the documents to them sooner.

On the client side, he has 3 yrs left on loan so he is looking seriously at just telling them to forget it and take the truck back. Since they are arguing the reaff was not filed on time they are pretty much arguing he doesn't owe them anything.

[justbroke]

On the client side, he has 3 yrs left on loan so he is looking seriously at just telling them to forget it and take the truck back. Since they are arguing the reaff was not filed on time they are pretty much arguing he doesn't owe them anything.

I love it when they argue facts not in question! So, now you get to tell them to eat steel!