AZ Chapter 7 BofA Car reaffirmation

[idainc]

We're about to file pro se. BofA has a CC of mine and a HELOC and a car loan. I owe 17.2 and the KBB Private Party Value is about 14 and I want to keep the car so I'd check the reaffirmation box.

Is there any issue with the other BofA debt and does BofA regularly reaffirm ? They offerred and we accepted a three month forebearance on the car and just now made an on time payment.

What amount can I reaffirm for and at what rate. SOrry - I have zero idea as to what to expect here. TIA !

[idainc]

Bump. Sorry but no response to this question. Any thoughts ?

[sadbutinneed]

Love to hear any experiences here too...

[Meatstick]

When you reaffirm you agree to keep the loan current without any changes to your original terms. If BOA is doing reaffirmations then they will send you the agreement and you, lawyer and TT will finalize it if its in your best interests.

Redemption is where you either have the current loan holder or another party agree on a current market value and then process a whole new loan with different terms. You can almost be assured of paying a sub-prime interest rate.

I looked into with our vehicle and with the outrageous financing rate it made no sense at all to even think of redemption.

I think reaffirmation and redemption are both not very smart and no benefit and leave you liable for the debt if you fail to make payments after BK>

[sadbutinneed]

I get that it leaves you liable, but if I surrender my car and have to pay subprime rates to replace it (if I don't replace it I can never leave my house with the entire family of 5), it's really the same thing. Since I'll be liable for the new loan (with higher interest rates) anyway. So if you aren't that underwater, I don't get the negatives about reaffirming a car.

[StartingOver08]

I reaffirmed one of my cars in BK and surrendered the other. The one I reaffirmed was with a CU and not BOA. I was able to renegotiate the terms of the loan with the CU and that is what was reaffirmed. Long story short, when I paid off the loan last Nov 2009 they sent me the title with no issues. Each of these negotiations is different. You have to speak to someone in the BK dept of BOA to find out if you can work with them on the terms. For example, on my other vehicle I had to surrender it because the lender was completely uncooperative. If you are satisfied with your current loan, then do the reaffirmation.

The reason the reaffirmation is discouraged is because if you lose your job or have a reduction in income, you will be on the hook for the loan repayment. Only you can know if you are comfortable with your terms as they are currently written. If you lose the car (repo) after the BK, it is a real credit issue. Any negative after your BK hits you very hard on the cr report. That is the primary reason for discouraging the reaffirmation. So you give yourself the best break for your fresh start. Don't load yourself with too much reaffirmed debt.

If you are uncertain at all, then surrender the vehicle and buy a beater until you can afford something better with cash. That is what I ended up doing with the "2nd" car (which actually is my primary vehicle - the other one my husband drives).

[sadbutinneed]

Should we call the bk dept on our own or wait for our atty to do it? Should we do it before or after 341 which is in two weeks?

[StartingOver08]

Personally, I negotiated the terms myself directly with the lender's BK dept on the phone and they put the terms in writing.

The lender, in your case BOA, will send out a reaffirmation just restating the original terms with the original note attached. If you are looking for the same terms call them and tell them to send the reaffirmation. They usually email it to the attorney and the attorney 'reviews' it and sends it to you. It requires your attorney signature as well as your signature. Not all attorney's will sign it. In that case, you need to have a hearing to make sure you can afford the reaffirmation. If you want to renegotiate the terms, you should (IMO) do it yourself directly with the BK dept.

I would do it right away and not wait for the 341. JMO.

[idainc]

Car is at $14.5K average KBB/Edmunds/NADA and I owe $17. Low miles, new tires and battery etc. Great shape.

Any feel for how far I might get if I negotiate ?

Do I - or can I - make a payment after filing ?

[StartingOver08]

I made payments on both of my vehicles while I was in Bk and trying to negotiate a better payment. I had to make the payments through the BK dept anyway because the billing stopped. They were current at the time of filing and thereafter. Naturally, on the vehicle I was not able to renegotiate, once the lender proved to be uncooperative I surrendered the vehicle and made no more payments. However, I surrendered it in my time and not their time.

Some of the things I was able to negotiate in my deal, that were important to me, were: 1) one skipped payment 2) reduction of payment from $540/mth to $455/mth 3) removal of cross collateralization (this was a CU where I had other loans) 4) extension of repayment period due to the reduced monthly payment 5) prompt mailing of my title to me once the loan was paid off in full.

Put in the terms that are important to you. Be creative!

[idainc]

Thanks for your reply. Was this BofA ?

I have three years left on $17.2 6.19% = $488. I suspect they wont drop the principal but might drop the rate to maybe 5% at 4 or 5 years. I can get to $405 or $335 respectively. I just want hte judge to sign off. I can make that case based on new tires / battery and low miles and 40% tax write off.

Any strategy here ? I DONT want to have to go out and pay 20% on a junker.

Much appreciate your help.

[StartingOver08]

It was not BofA. Your success will depend upon the BK representative. Some of the larger banks are especially dense and won't modify anything.

Go in with a plan. The reaffirmation form has specific blanks for interest rate, term, monthly payment etc.

I wouldn't use the new tires/battery/write off thing with the judge IMO. I would use the current black book value less 20% or actual market value if you can find recent sales of your vehicle type and would run the figures using your 'new' after BK budget to make sure its affordable.

Have a plan B in case they won't change the rate/terms on your loan.

[idainc]

Thank you very much for your reply. I do appreciate it.

I found the form and this video on the local court web site - http://www.azb.uscourts.gov/default.aspx?PID=84

The judgeis lookig for some sort of concession form the lender or sh'll send you back to them to rethink. In any event asI undertand it your transportation costs cant exceed 20% of the budget and even unmodified these costs wont. I'm upside down a little bit but not a massive amount. About 15%.

My thoughts on the tires and mileage etc. point to lower future costs. It is just my wife and I and it is our only car partially written off on a family owned business.