Reaffirmation update (kind of scary)

[pikaroth]

My last thread updating my story is one I am not going to completely cover again, but if it matters, here is the link to see what got me to this part that I am going to write about:

http://www.bkforum.com/showthread.php?67789-My-Updated-Story

Toward the end, we started discussing reaffirmation on a loan for a car through USAA (and just in general, really).

Well, today was the day. I woke up to an e-mail from my lawyer saying the reaffirmation agreement came in, and he wanted me to get back to him within five days on my decision. I called within 30 minutes and told him I would be in today to fill everything out.

The agreement was 14 pages in total, and had one very, very scary part. Check off was, "Presumption of Undue Hardship." I sat down with the attorney to go over everything, and I was advised that it was 'likely' the judge would deny the reaffirmation. I freaked out. I have been paying on the loan for almost a full four years now, never a missed or late payment even once I decided on bankruptcy. It is my *ONLY* vehicle, and it will be fully payed off in 12 months. He immediately told me not to worry, said if it's approved, then it's done and over with, but if it's not (agian, which is likely) he said they would just (forgive me for forgetting all the terminology) file a new motion or some such, lowering my expenses, and it should not be an issue. Once that's done, he said usually it would then be approved, and if not, then maybe I'd have a court date. As with every single thing I have been told since I originally went there, I have never been told anything incorrect, but this is the first time in the process that I have almost literally freaked out.

I've been upset, sad, depressed, etc., but never kind of 'freaked.' It's the best I can describe it.

Again, I was told that if and when the denial comes (he even showed me what one looked like) to just stay calm, and he would handle everything. The funny thing? When all of this began in early October, the ONE thing I was under the assumption of (we know what that means) is that my car would absolutely not go anywhere as my sole mode of transportation and all that. Now for the first time in awhile my head is swimming.

Undue hardship? As I've posted in some other posts, I now actually HAVE money and making my car payment doesn't even phase me due to not having any credit card payments. I thought there would be the reaffirmation agreement and that would be that. Again, he did say that perhaps it would be approved and then nothing beyond that, but he did advise me it was 'likely' to not be approved. Even if USAA agrees, I agree, and my attorney agrees, that's not enough? Sigh.

One more thing: if this turns out poorly, does anyone know anything about simply giving USAA the full amount I owe them in one lump sum? I won't lie, I've already called my parents (something I never thought I'd have to do again) and even my girlfriend jumped in and said she'd gladly help pay it off. Thinking that makes me sick to my stomach, but, to be blunt, I'd take it if I had to in order to keep the vehicle, but if it is denied and nothing can be done, would the offer to give them everything I owe be on the table?

I know some of that probably can't be answered, I'm more just venting. I was SO happy the past week or so with my 341 date, and then when I got the reaffirmation e-mail, and that has come crashing down.

[BrokeinMD]

http://www.bkforum.com/showthread.php?67770-I-was-denied-my-Car-Reaffirm...Yippee!!!!&highlight=yippee

Pika, the above thread was my experience through the car reaffirmation process. I filled out the paperwork to re-affirm, my attorney and I went to court. My attorney argued re-affirming the debt would create undue hardship for me. The judge denied my re-affirm request, but in the Order stated that I satisfied the bank's request to re-affirm, therefore they could not take the vehicle from me. I keep the car and am continuing to pay on it. Hope my experience helps you to understand the process better.

[pikaroth]

Thanks for the link BrokeinMD! I read it and, oddly, am more confused. Does one in this case NOT want to be reaffirmed? If I understand things correctly, if I do not get reaffirmed, USAA can, in fact, take my car from me, right? Or am I off base on that? I fully intend to keep making my payments and, strangely, if they were to take my car, I'd have to spend even MORE money on a new car which truly would be a situation of hardship!

I have no desire, zero, zip, nada, to even think that my car can be taken from me. That's my goal. Reading your entire thread, though, it sounds like not getting reaffirmed was the 'right' choice. Confusing day for me!

[BrokeinMD]

My goal with re-affirmation was to lose so that the debt could still be discharged. When you make the effort to re-affirm, you satisfy the bank's request to do so, and the judge either grants it or denies it. If he denies it, as he did in my case, he wrote the order stating that Suntrust, my lender, could not come back at me for the vehicle as I satisfied the Law of making the effort. It's confusing, but to put it as concisely as my attorney told me, "It's not a big deal. You complete the paperwork, I'll send it to the bank for you. You get a hearing before the BK judge. Your argument is that you can pay it, I argue against you that you can't afford it. I'll win, you lose, you continue to pay and keep your car, the debt gets discharged."

[daylate]

My guess is that if you only owe 12 months on it and you keep making your payments you'll be ok.

FL may be different than MD in regards to what happens in the denial of a sought after reaffirmation-not all districts/states do things the same.

All else fails, I think you are ok with paying it off after the 341 but better check with your attorney on that one.

[BrokeinMD]

Here is the actual language from the Judge's order after my "lost" re-affirm:

ORDERED, that the Reaffirmation Agreement entered into between the Debtor and Lender filed with the Court
on XXX is hereby disapproved; and it is further
ORDERED, that the Debtor has complied with the requirements of 11 U.S.C. § 521(a)(2) by timely stating his/her
intention to reaffirm the loan and by timely entering into the Reaffirmation Agreement with the Lender; and it is
further
ORDERED, that the provisions of 11 U.S.C. § 362(h), 521(a)(6) and 521(d) do not apply, the vehicle remains
property of the estate, the automatic stay remains in place with respect to the vehicle until such time as the stay
terminates under 11 U.S.C. § 362(c) or (d), the Debtor is not obligated to turn over possession of the vehicle to the
Lender, and the Lender may not exercise remedies as a result of default under any ipso facto clause contained in the
loan agreement.

[BrokeinMD]

Yes, Daylate, Agreed. We'll be hearing from the Floridians, soon, I'm sure!

[pikaroth]

Here is the actual language from the Judge's order after my "lost" re-affirm:

ORDERED, that the Reaffirmation Agreement entered into between the Debtor and Lender filed with the Court
on XXX is hereby disapproved; and it is further
ORDERED, that the Debtor has complied with the requirements of 11 U.S.C. § 521(a)(2) by timely stating his/her
intention to reaffirm the loan and by timely entering into the Reaffirmation Agreement with the Lender; and it is
further
ORDERED, that the provisions of 11 U.S.C. § 362(h), 521(a)(6) and 521(d) do not apply, the vehicle remains
property of the estate, the automatic stay remains in place with respect to the vehicle until such time as the stay
terminates under 11 U.S.C. § 362(c) or (d), the Debtor is not obligated to turn over possession of the vehicle to the
Lender, and the Lender may not exercise remedies as a result of default under any ipso facto clause contained in the
loan agreement.

Okay, I appreciate your update and posting this. Makes more sense to me now from what I previously read regarding your case. Sounds great, actually.

Now, as has been said, I, too, will be waiting for fellow Floridians.

[IBroke]

The way I see it, they can only take away the car if YOU (again YOU, not the judge) don't want to reaffirm. You can't force the judge to approve a reaffirmation - that's probably why you can't be punished for it (repo).

[pikaroth]

The way I see it, they can only take away the car if YOU (again YOU, not the judge) don't want to reaffirm. You can't force the judge to approve a reaffirmation - that's probably why you can't be punished for it (repo).

See, that right there is what I'm wondering about, and I'm so glad you brought it up. It also sounds like what BrokeinMD posted.

So, if I go to reaffirm, which I did today, and I get denied, that is that, and it is not possible to take the car as long as payments are up-to-date? While I know each situation is different, it seems to be that is what people here are saying.

[BrokeinMD]

Good, Pika. I hope that what happened to me in MD will also apply to your situation. The hearing was simple, really just a cattle call procedural thing. IBroke, did you have to re-affirm yours, or did you surrender all?

[BrokeinMD]

As you see the Order shows that for my case in MD, all the Debtor has to do is satisfy the requirements of making the effort to re-affirm. So, we need to see if that applies in FL as well.

[IBroke]

IBroke, did you have to re-affirm yours, or did you surrender all?

My situation was a bit different. I wanted to reaffirm (credit-reporting, low balance, balance was equal to value, only vehicle in household) and noted that on my BK-schedules accordingly. However, the car-lender never prepared an agreement and I sent them a certified letter, telling them that I wanted to reaffirm because I wanted future payments to be reported as well and they would have to react fast IF they insisted on a reaffirmation in order to do so based on the fact that a reaffirmation agreement has to be entered PRIOR to discharge. If not, I told them they could use this letter as my permission to report future payments.

In the end, I did not reaffirm, the lender continues to report my payments AND I don't have any BK-notation on that tradeline.
Another reason why they probably didn't insist on the reaff. was the fact that my mother co-signed on that loan. After all, she is still responsible for it - even after my discharge.

[pikaroth]

I hate to bump my own thread, haven't done that in awhile, but I just wanted to see if anyone else had any other input at all? Positive, negative, or something in between? While I have calmed down somewhat, I can't lie and say it has completely gone away. I find my heart still rapidly pounding any time it crosses my mind.

I would, though, like to again thank everyone who has already responded not only here but to all of my posts. As I've said countless times, everyone here is just awesome.

[ozarkmiss]

You should do a search for "usaa reaffirmation auto" or "usaa ride through" . We have an auto loan with them. We are current on our payments. We "rejected" the reaffirm agreement they sent. We're a little upside down on the truck and it didn't make sense to stay liable for that note. The car - truck - has been modified a good deal. Like I said, we're current. They aren't going to want it back as long as we pay the note. Check the forum. You'll see there are many others that have not had trouble doing a "Ride through".