ANOTHER Reaffirmation Question

[Yme]

I've read several threads on the negatives of signing a reaffirmation agreement. Is there ever a good reason?

Here's my deal: I have a 2010, nothing fancy, sub-compact. The balance is
>$12K with a modest monthly payment. The creditor has already sent the agreement to my lawyer who refuses to sign off on it (thinks my loan is too new, have 5 yrs left). So I'll need to schedule a hearing with the judge to get him to sign off, assuming he does. All terms in the reaffirmation agreement are the same as my current loan with the creditor. Why would I not want to reaffirm?

Or I can do what many encourage on this forum: a ride through. But if I do that, aren't I taking a chance that the car could get repoed? Basically, in a ride through there are no guarantees but the RA is a contract...

Thanks in advance for your suggestions.

Yonnie

[newbie2]

I've read several threads on the negatives of signing a reaffirmation agreement. Is there ever a good reason?

Here's my deal: I have a 2010, nothing fancy, sub-compact. The balance is
>$12K with a modest monthly payment. The creditor has already sent the agreement to my lawyer who refuses to sign off on it (thinks my loan is too new, have 5 yrs left). So I'll need to schedule a hearing with the judge to get him to sign off, assuming he does. All terms in the reaffirmation agreement are the same as my current loan with the creditor. Why would I not want to reaffirm?

Or I can do what many encourage on this forum: a ride through. But if I do that, aren't I taking a chance that the car could get repoed? Basically, in a ride through there are no guarantees but the RA is a contract...

Thanks in advance for your suggestions.

Yonnie

You've read many threads and much advice from those who have taken the time to share their experiences and wisdom about reaffirmation. The only "good" reason to ever reaffirm a car loan is if there is little time left on the note and you have equity in the car. Also, check your state laws. In some states if you are current on the payment they cannot repossess.

[limabean]

I posted a little while ago about the similar decision I had to make on my car. I chose to reaffirm because:
1 I had equity in the car and an aggressive payment schedule that keeps me ahead of further depreciation,
2 I wanted the good payment record I had to show up post-BK,
3 I knew I wanted to keep the car for a while and because
4 I also knew that with equity in the car I could sell fairly easily to get myself out of trouble if I encountered it. Just by selling in the regular used car market.

I also feared:
1 A repossession
2 A change in the contract terms (although some told me here that wouldn't happen - and I believe them)
3 Having to purchase a replacement car sooner than I wanted to

I understand the good advice not to reaffirm. With three small kids, I needed a good car that was reliable and affordable.

I don't regret my decision, with all good respect to those that advised otherwise.

BTW - the judge approved my reaffirmation without a hearing (a surprise) even though I have a negative DMI if I include the payment.

I'm so far glad that the reaffirmation was approved.

[Yme]

Newbie and Lima,

Thanks for your responses. I'll check my state's repo laws.

Lima: Did you contact the judge directly (as I have been advised) or did they contact you?

Thanks

[nceguyfromne]

I've read several threads on the negatives of signing a reaffirmation agreement. Is there ever a good reason?

Here's my deal: I have a 2010, nothing fancy, sub-compact. The balance is
>$12K with a modest monthly payment. The creditor has already sent the agreement to my lawyer who refuses to sign off on it (thinks my loan is too new, have 5 yrs left). So I'll need to schedule a hearing with the judge to get him to sign off, assuming he does. All terms in the reaffirmation agreement are the same as my current loan with the creditor. Why would I not want to reaffirm?

Or I can do what many encourage on this forum: a ride through. But if I do that, aren't I taking a chance that the car could get repoed? Basically, in a ride through there are no guarantees but the RA is a contract...

Thanks in advance for your suggestions.

Yonnie

Reaffirmation may be a good idea IF you plan on keeping your car and paying it off anyway, it is a good investment (it has equity or is at least not in a great deal of negative equity) and you are confident you will continue to be able to afford the payments.

Having a reaffirmed account in good standing will enable you to begin rebuilding your credit immediately after your discharge, since obtaining new credit with which to help rebuild your score is going to be challenging. If you do not reaffirm, your auto loan will be listed on your credit report as discharged and the bank will not report your on-time payments. You will be paying the bank for the privilege of not repossessing your car and pretty much nothing else. Reaffirm, on the other hand, and you will have a nice "on-time" mark on your credit report each month.

Reaffirming will also help you maintain a relationship with your bank, which may increase your chances of obtaining future credit from them when you need or want it.

Reaffirmation is not a good idea if you feel you may have difficulties making your payments in the future. You will not be able to discharge your reaffirmed loan later on if you become unable to pay (unless by some miracle you can keep them off your back for 8 years until you are eligible for BK again). They can repossess your car and sue you in court for the deficiency. In a case like this, you are probably better off not reaffirming and taking a "wait and see" approach, since it is likely you will continue to keep your car as long as you are making payments.

[limabean]

Yme,

I did not contact the judge or the court directly myself. I am pro se (filing without an attorney), so that may have made a difference, but I don't know.
In my case my creditor sent me a reaff document, I reviewed it (they did a good job, except the value of the car which they refused to change - grr!), and then signed and sent it back to them. They filed it with the court (I checked on PACER to make sure). I expected a hearing to be scheduled without my need for prompting it. But instead, a notice was posted that said it was approved. That was about 2 weeks after it was posted.
Best of luck to you in your decision! Everyone's case is a bit different.... :-)

[tcreegan]

good reasons for reaffirmation

Hello Yonnie,

limabean has your good reason(s) to reaffirm.

Good lawyers do not sign off on reaffirmations b/c it exposes them to some liability

You or your creditor file the reaffirmation agreement w. the court. (I have never heard of someone contacting the judge directly, although I don't know how it could hurt..?)

Even denied, all is not lost; Court cases are rolling in holding that if you attempt to reaffirm, but are denied, stay current and the lender cannot repossess.

Good luck to you !

Tom in Colo