Chapter 7 and Reafirmation of Auto

[davidpylejr]

My mother filed chapter 7 that was discharged and closed in October. She has kept up her Mortgage and Auto loans to Wells and Ford respectively. Sunday night they came and reposessesd the car. Comes to find out she only signed an "intent" to keep both. She was pretty ignorant about what forms needed to be done to do any of the BK but she did have an attorney and she did make it clear to him that she wished to keep the car. Ford said since they had no reafirmation that they had to get it whether she had been making payments or not, which I do understand. The Attorney is out of the country until monday so no one can answer what is going to happen? Will she be able to get the car back? She definately wants to keep the car. Any insight here would be appreciated she is a nervous wreck waiting for next Monday to come around.

Thank you

[despritfreya]

The folks that run "Ford" are a bunch of idiots. Ford's policy is "no reaff, no vehicle" regardless of payment history. Your mom should just say "screw it...let Ford have its pathetic auto".

Your mom cannot reaffirm the vehicle once the Discharge has been entered. The Reaffirmation Agreement had to be signed by all parties prior to the entry of the Discharge. As a result, I doubt she will be able to get the vehicle back. The fact that she did not reaffirm also means that Ford cannot sue her for any $$$ now that it has stupidly repossessed a vehicle securing a perfectly performing loan - no wonder FMC is losing so much money.

Des.

[tcreegan]

Hi david,

Found this for you:

Some creditors believe that the new 2005 bankruptcy law requires that a debtor sign a reaffirmation agreement if they want to retain the vehicle. However § 524(c) states that any obligation must be ‘enforceable under applicable non-bankruptcy laws, whether or not such a debt is waived.” As a result, if the debtor is current on his payments, keeps his vehicle insured and still refuses to sign a reaffirmation agreement, there appears no default that is enforceable under non-bankruptcy laws

http://www.debtkid.com/reaffirmation-agreement-in-bankruptcy-what-is-it

Not sure where I got this, but I read the law and it said the same thing:

Of course 11 U.S.C. §541(c) prevents foreclosure/repossession if you are current, have insurance, abiding by all the terms of the contract.

If you get a lawyer and sue on this, there will be a chorus of cheers from folks FMC has screwed over..

Tom in Colo

[debee]

According to 11 U.S.C. 362(h), 521(a)(6) and 521(d) after stating her intention to reaffirm, your Mom would then have had to file the reaffirmation documents with the court prior to discharge. Since that didn't happen, Ford was able to repossess according to state law and the terms of the original contract. Ford has all the cards. I don't think she'll get the car back, but I hope she does.

Please come back to post and let us know what happens.

[Fallonedward]

I would have to agree that FMC does not use the best judgement in this regard.

The folks that run "Ford" are a bunch of idiots. Ford's policy is "no reaff, no vehicle" regardless of payment history. Your mom should just say "screw it...let Ford have its pathetic auto".

Your mom cannot reaffirm the vehicle once the Discharge has been entered. The Reaffirmation Agreement had to be signed by all parties prior to the entry of the Discharge. As a result, I doubt she will be able to get the vehicle back. The fact that she did not reaffirm also means that Ford cannot sue her for any $$$ now that it has stupidly repossessed a vehicle securing a perfectly performing loan - no wonder FMC is losing so much money.

Des.

[Fallonedward]

I have a loan thru Chase Auto and filed the reaffirmation documents but my attorney says due to my negative dmi, he will not authorize nor will anyone else authorize me to reaffirm. Can I reaffirm even if my attorney says I can not. This is my only transportation to and from work and hubby's car just died yesterday and we have no funds to replace his car let alone mine if it was repo'd.

According to 11 U.S.C. 362(h), 521(a)(6) and 521(d) after stating her intention to reaffirm, your Mom would then have had to file the reaffirmation documents with the court prior to discharge. Since that didn't happen, Ford was able to repossess according to state law and the terms of the original contract. Ford has all the cards. I don't think she'll get the car back, but I hope she does.

Please come back to post and let us know what happens.

[despritfreya]

I have a loan thru Chase Auto and filed the reaffirmation documents but my attorney says due to my negative dmi, he will not authorize nor will anyone else authorize me to reaffirm. Can I reaffirm even if my attorney says I can not. This is my only transportation to and from work and hubby's car just died yesterday and we have no funds to replace his car let alone mine if it was repo'd.

Yes, you can reaffirm. If the attny does not sign the Attny Certification there will be a presumption of undue hardship. This should prompt the Court to set a hearing that you will have to attend. At that hearing you will have to get the judge to agree that signing is in your best interest.

While I have my own "Certification" that I use (instead of the one sent by the creditor) there are times when I simply will not sign anything. I send the reaff to the client with instructions and a stern warning that signing is probably a mistake (usually for some toy like a boat). I also tell them that they will have to attend a hearing. It is up to the client to follow through.

Des.

[davidpylejr]

Ok so the other part of this question is where if any is the attorneys liability in this. When my mother called the attorneys office on Monday to find out what was going on, as I stated the attorney was out of town, as was the legal assistant. The secretary said "yeah your reafirmation agreement is right here in your file" It was never given to my mother to sign, and as I stated she knew that she signed an "intent" and as far as she knew that was all she needed. Is this ignorance? Perhaps, but isnt that why we pay these attorneys to handle these cases? It was known and noted from the time she turned in original paperwork to the 341 meeting with the trustee, to the point where she signed the intent that she wanted to keep this vehicle, it would have been insane to give up an 18 month old vehicle bought on a Ford Coprporate discount with rebates, good amount of trade in equity, and a ZERO percent interest rate. Ford is not going to lose a dime when they auction this car. I understand that my mother is a bankrupt debtor here, but it seems to me she is getting screwed really really bad.

[HHM]

Tell your mom to go get another car. It won't be a problem. In fact, she can probably go down to the Ford Dealership and get another, better ford, for what she was paying on the one that got repo'd.

Reaffirmation agreements are a waste. Why let Ford be a bully.

As for attorney liability, probably very little. If your mother has zero or negative monthly income, the attorney couldn't sign it anyway, and most judges don't approve them in the first place, so your mother may not have been harmed "that much."

[debee]

Can I reaffirm even if my attorney says I can not.

If the lender is a credit union as defined in section 19(b)(1)(A)(iv) of the Federal Reserve Act there is no presumption of undue harship and you don't have to go to a hearing.

Also, there have been several cases where the judge wouldn't sign off on the reaffirmation but she/he stipulated that the lender couldn't repo the car as long as the debtor didn't default making a back door "ride thru" possible. So don't lose hope yet.

edit: I just noticed the lender was Chase, therefore not a CU. Note to self: drink first cup of morning coffee BEFORE posting.

[Fallonedward]

D: Your help is always welcome, thanks

If the lender is a credit union as defined in section 19(b)(1)(A)(iv) of the Federal Reserve Act there is no presumption of undue harship and you don't have to go to a hearing.

Also, there have been several cases where the judge wouldn't sign off on the reaffirmation but she/he stipulated that the lender couldn't repo the car as long as the debtor didn't default making a back door "ride thru" possible. So don't lose hope yet.

edit: I just noticed the lender was Chase, therefore not a CU. Note to self: drink first cup of morning coffee BEFORE posting.