Ally formerly GMAC reaffirmation

[mommi2many]

So Ally sends a reaffirmation packet today. On my SOI I checked reaffirm, but I have really been praying for a ride through since that is in my best interest. As soon as I filed, Ally revoked my online privileges, but in my packet today they say my online privileges are reinstated because I chose to reaffirm.

I filed pro se so I am trying to understand this reaff agreement thoroughly and I am asking for everyone's 2 cents. Here is the paragraph I am trying to understand:

If your case discharges without the reaffirmation agreement being valid and/or approved, your reactivated billing statements will be suspended, at which point you may be eligible to receive Informational Statements to assist you with voluntary payments should you desire to retain possession of the subject vehicle.

What if I don't return this reaff? Do you think I could actually do a ride through? That's what I think I'm reading or at least hope I am.

2 cents please.

[tcreegan]

Hi mommi2many,

To me this sounds like standard operating procedure for a ride-through.

A good sign for you,

Tom in Colo

[mommi2many]

Woohoo! Thanks Tom for your 2 cents and telling me what I wanted to hear.

[jsofaz]

Our Chapter 7 discharged almost 3 months ago. We chose not to sign a reaffirmation on our GMAC loan. We weren't sure if they would do a ride through or not. But, so far, we still have our vehicle. We just send the payments in each month.

[drowningNIL]

We had GMAC and now they are Ally, too .....my husband called them after they sent us a pissy letter and they told US that if we did not reaffirm they would take the vehicle. (FYI we've never been late or missed any payments) We want that vehicle but have yet to receive any reaffirmation package....I guess we'd better get on that!

Good luck!

[rjmwx81]

Sounds to me like they want you to at least try to reaffirm, but will allow a ride-through if the judge disallows the reaffirmation.

[stueban]

We live in California as well, and our atty told us there is a law in CA that states that they (lender) can come and repo your vehicles, regardless of payments being current or not, if they are not reaffirmed. And if we wanted to keep the cars, to reaffirm them. He didn't say how common it is, but he said it does happen. Our lender (Toyota) is demanding reaffirmation on the vehicles. which isn't an issue for us as we plan on keeping them. Just wanted to let you know what we were told.

[mommi2many]

Thanks for the advice, everyone. One more question: Do you think I should call Ally and ask what happens if I don't send back the reaffirmation paperwork or should I let sleeping dogs lie and take my chances?

[tcreegan]

Hi all,

Here is some research I did on the reaff/repo situation

Upon filing a Chapter 7 bankruptcy petition, a debtor must, within 30 days of that initial filing date,
file a 'statement of intention' with respect to any debts secured by assets of the bankruptcy estate.
This the 'statement of intentions' page. You mark 'reaffirm' if you want to keep the property

The debtor then has, under §521(2)(B), 30 days from the first date set for the §341 creditors' meeting to "perform his intention"
(e.g. file/mail a reaffirmation agreement) with respect to the secured property.

Sending in a reaff, change the terms to be very favourable to you. The lender may balk, and then you send out another offer. You and lender have something to agree on (might even be the original terms if they weren't too bad), that gets filed with the court. You attorney has to sign off on it, and they usually won't. (At least not good attorneys, several reasons for them to not sign off on a reaff) So you get stuck going to a hearing before your BK judge, you make your case why the reaff is good for you (or not good for you) and the Judge allows or denies the reaff.

At this point you have 'performed your intention' to reaffirm, the ipso facto clause cannot be invoked and you/lender are governed by the original contract terms.

You don't want a reaffirmation, so you hope the Judge denies it. If not, you wait for the lender to take to long and discharge happens. Or you wait till it is signed, then rescind it during your 60day cooling off period.

Then, if necessary, you remind them about 11 U.S.C. §541(c) which prevents foreclosure/repossession if you are current,
have insurance, abiding by all the terms of the contract. This is federal law but some states have the same law; I only have run across two: Mass, and Conn. But from reading lawyer websites I suspect there are more.

Presently, if there is no default on the debt at filing , the following circuits do not require the debtor to reaffirm the debt to keep the collateral.
4th Cir. see Belanger, 962 F.2d 345 (1992)

9th Cir. see Parker 139 F.3d 668 (1998)

10th Cir. see Lowry FCU v. West, 882 F 2d 1543 (1989)

Hope this helps someone!

Tom in Colo

[Ann]

Well, here is my 2 cents for what it is worth...we did reaffirm with GMAC or Ally because we were told on the advice of our lawyer that they were famous for repossessing your car whether or not you are current if you do not reaffirm with them. I did not want to take any chances with them so we signed the reaffirmation agreement. Here is the question...how much longer do you have to pay on your loan? If you know you are going to pay it off soon (say 6 months or so) and you know you have or will have the income to make those payments I would reaffirm. This is not like a mortgage where they will let you stay as long as you pay. If they want they can and will take your car if you do not reaffirm. I'm ONLY speaking from MY personal experience with GMAC!!!

[mommi2many]

Actually, my car is pretty new so I still have 60 months to pay on it. For now, without my credit card bills, I can afford it. But, considering the long time I still have to pay on it that is my reason for really not wanting to reaffirm. You never know what the future holds. Although, I need to have a car and we don't have money to buy one with cash right now. So you see my dilemma.

Also, our DMI was negative -$400 so it's quite possible the judge will not let us reaffirm anyway. The reason why such a high DMI is because I used every legitimate expense I could think of in case the trustee threw out any questionable ones we would still qualify for a Ch. 7. Just an FYI in case anyone asked if we could really afford the vehicle with negative DMI.

Thank you all so much for all the feedback. I especially love to hear others dealings with Ally/GMAC. Please keep it coming.

[jsofaz]

We knew we were taking a risk with GMAC taking our vehicle. But I'm glad I didn't reaffirm because work has slowed down at my husband's job. That means we have less money coming. It helps to know that if that car payment becomes a problem for us, we can just let it go without any repercussions. Anyway our Chapter 7 discharged on July 27. As of today, October 15, we still have our vehicle. All payments and insurance are current. That is almost 3 months since discharge. If they do come and get it, however, you guys will be the first to know!

Thanks, Tom for your research. Looks like useful information.

[mommi2many]

jsofaz,

Did you get reaffirmation paperwork and just not send it in? Was it not approved by the judge? I am very interested to know as all of this helps me to make a more informed decision. I want to just not send in the reaffirmation paperwork and keep everything current.

[jsofaz]

We never received reaffirmation paperwork. I called and asked them about it and they told me that they couldn't send me a reaffirmation unless my attorney filed an amendment to our petition. On the petition, instead of checking the reaffirm box, our attorney checked the 3rd box and wrote in pay and retain. Apparently GMAC doesn't send reaffirmations unless reaffirm is actually checked. Anyway I spoke with my attorney about it. We decided to take a chance on a ride through. I hope this helps. It's so hard to know what to do. I know. I went back and forth. But now I'm glad it worked out the way it did. Even if they still take it, I think we're better off this way. Oh, and we still have 3 years to go on the loan. I don't know if that matters or not.

[mommi2many]

jsofaz,

Thanks for sharing your circumstances with me. It was very helpful. I'm leaning towards just taking a chance because I like the idea of not being liable for my car payment considering I have so long to continue to pay for it. And who knows what the future holds. The purpose of bk is to get a fresh start and I would feel "fresher" without this car payment.