Statement of Intentions in regards to my car

[mommi2many]

My husband and I are not sure if we want to reaffirm or vehicles or not. We are current and definitely need 2 cars, but debating whether we will keep them. Can we mark reaffirming and then change our minds? Is that fraud? Do we still make payments during the automatic stay or save that money until we decide if we keep them or use the money to get new cars?

I really appreciate everyone's input.

[tcreegan]

car reaff

Hello mommyi2many,

Marking the reaffirm box on the statement of intentions does NOT mean you have reaffirmed a debt. Marking it and doing something else is not fraud.

To really reaffirm, you have to contact your lender and negotiate a contract that is in your best interests. It has to be approved by either your lawyer or the judge and is filed at the BK court. You can rescind a reaffirmation in the next 60 days.

For many lenders, if you are current, make payments during the BK and after, they let you continue to make payments and do not repossess or foreclose (and in many states, they cannot repossess or foreclose if you are current on payments) This is called a 'ride through' The nice thing about these is that you are not legally liable for the debt. Something happens to you later, you can just walk away.

Many people know going into a BK that they will surrender the car so they quit making payments a couple months before the BK filing. The BK filing stops repos for another month or so. They take all the payments and use them to buy a new/used car.

I seem to be blathering on and on....hope some part of that gibberish is helpful!!

Tom in Colo

[AngelinaCatHub]

Tom in Colo is correct except for this statement "Marking the reaffirm box on the statement of intentions does NOT mean you have reaffirmed a debt. Marking it and doing something else is not fraud."

Here is why I disagree: IF you are marking this to persuade good intentions and you don't mean it, that would be an un-truth and regarded as working the system. If you truly wish to reaffirm, mark it. If you mark it because you are not sure, make a notation on the paper work. THE best bet in bk is total honesty with no shadow of improprieties.

If you wish to "Pay Through" Tom is correct, they will not take your car. If the Judge however, feels you cannot afford those payments he can vacate your intent, or even set aside a reaffirmation so you see, it is not always your choice.

Once you bk, you own NOTHING. It becomes an estate of the Court until your Trustee satisfies to the best of his ability and your resources, the creditors. He is working for the creditors but for the most part, is also fair with you. The Judge works only for fairness on both sides and wants you to succeed in your "new start" in life.

If you do decide to abandon one car, then yes stop paying on it. Are they financed at the same place? Hope not. Pay through on the single car if you intend to keep one and abandon one. 'Hub

[mommi2many]

No, both cars are not financed at the same company. My husband's car is financed through Wells Fargo. That is the one we would definitely like to get rid of because it is a gas guzzler with a v8 hemi engine which also makes our insurance more.

My car is financed through GMAC. I think I've heard bad things about them with a ride through. I've only had my car 8 months so I am upside down. The interest rate is 7% and I am afraid of getting something else with a higher interest rate.

We have so much to figure out and we are filing pro se hopefully in the next few weeks.

[wnguyen]

Angelina

But what if I change my mind? What if at first I thought I'd keep the car so I chose to reaffirm but after filing, the economic condition gets worse, I'm not sure if I can afford it in case I lose my job? That doesn't mean I'm not totally honest or trying to work the system.

[tcreegan]

Gmac

Hi all,

Hi Angelina, I was thinking along the lines of wnyguyen, you mark reaffirm and then later change your mind, don't follow up on it, or simply can't get an affordable reaff.

Hi mommi2many, I don't know how GMAC auto is, but I have some horror stories about GMAC mortgage....

...but it may not matter. Many states consumer protection laws say a lender cannot repossess if you stay current on your payments. Check w/ a local lawyer for the situation in your state.

That said, upside down at 7%.....might be time to look at low-mileage used cars.

Whatever you do, I hope it turns out for the best,

Tom in Colo

[mommi2many]

Tom,

Thanks for all the great info. I am in California and have read that we are not protected in a ride through, but some people do it and have no problems.

Lots to think about and figure out. I'd love to have no car payment so definitely need to look into possible saving car payments to put towards a used car.