Reaffirmation and presumption of undue hardship

[mb10240]

Plain and simple -- the presumption of undue hardship exists in regards to my car loan reaffirmation. Payments are a little under $300/mo. and they will continue until June 2013. I am not upside down in the loan -- the car is worth about $11650, while I only owe about $9K. Without the car payment, I'm still in the hole on monthly expenses by about $180/mo based on my Schedules I & J.

Realistically, my household expenses fluctuate monthly and some can possibly be reduced. I've managed to keep my car payment current thus far and have never been late on a payment. Additionally, while I am unemployed, job prospects are starting to pick up, and I am tentatively teaching some classes in February for a lump payment of around $5K.

So my question is this: what should I say in my statement regarding how I can pay for the car, despite being in the hole every month on I&J? While I personally don't have any income now and can't report any as a result on I, temp assignments may come up (hell, I've gotten 2 since filing for bk), but they're obviously not guaranteed, and I have a tentative teaching assignment, which is (of course) not guaranteed....

I just don't want to say anything that will draw the ire of the trustee or UST. I wouldn't want to be seen as hiding income or information (because I'm sure as heck not!).

(and yes, I understand that regardless of whether or not the reaffirmation is approved, I will still be able to "retain and pay"... that's not the issue.)

[tcreegan]

Hi mr brown,

If you are going for an actual reaffirmation, there is a good chance it isn't going to be approved. The decision is not by the Bk trustee/US Trustee, you need to have your atty sign off on it or get the BK judge to approve it. (and of course you need the lender to agree and sign it)

Most attys won't sign off a reaffirmation, it exposes them to some liability. Trying to convince the judge when you have a neg. DMI before the car payment and are unemployed/under employed...tough call, I would hate to put odds on it.

...and thank goodness lenders are agreeable to retain and pay since the Bk law got rid of it.

Tom in Colo

[mb10240]

If you are going for an actual reaffirmation, there is a good chance it isn't going to be approved. The decision is not by the Bk trustee/US Trustee, you need to have your atty sign off on it or get the BK judge to approve it. (and of course you need the lender to agree and sign it)

Oh I know that the trustee / UST has nothing to do with the reaffirmation agreement. My concern is more that any explanation I might use as to how I intend on paying for the car could be "used against me" by the trustee or UST to force me into a 13. Clearly, if I was not accounting for income in my BK filing that I later accounted for in my reaffirmation agreement, I'm sure they could.

But, I'm not hiding anything: while I indicated I had no income on Schedule I due to unemployment, I also indicated later on the form my temporary employment situation (i.e. I registered with a temp agency 11 months ago, received 1 assignment in that time. Since filing, it has improved somewhat, and I've had an assignment for 3 weeks now, and I'm anticipated, but not guaranteed, to get further assignments).

Pro se, too, so I will be attending a hearing. I know for a fact that if I was representing somebody with the same numbers I have, I sure as hell wouldn't sign off on the reaffirmation just because it simply doesn't look good on paper.

What's funny is that the reaffirmation doesn't change the terms -- I made no attempt to negotiate a lower payment because I'm happy with the payment as it is now. Either way, if its reaffirmed or I get a ride-through because the agreement isn't approved, I still pay the exact same amount for the exact same length of time... lol

[debee]

Oh I know that the trustee / UST has nothing to do with the reaffirmation agreement. My concern is more that any explanation I might use as to how I intend on paying for the car could be "used against me" by the trustee or UST to force me into a 13. Clearly, if I was not accounting for income in my BK filing that I later accounted for in my reaffirmation agreement, I'm sure they could.

You can use third party contribution commitments to rebut the undue hardship. Not a part of your bk at all so no issue with that. Everywhere I see undue hardship mentioned, additional source of funds is mentioned. It's even in the Congressional record. I think it has way more weight than being able to juggle the budget.

Your monthly payment is extremely reasonable. You have some equity. You need a car for work, especially since as a temp you may be called on a moment's notice to places inaccessible via public transport.

I don't suppose your loan is with a credit union? Have you read In re: Schmidt? (s'about reaffirmations in your state)

I wonder too if you are socking away any retirement funds. If you don't have a third party, maybe you could submit that you will refrain from saving for retirement until the car is paid off. After all, working now is what will fund your future and you need the car to work.

[tcreegan]

Stay current mrbrown, and ride away! Savvy lenders don't want to 'eat steel'