Reaffirmation papers conflict with schedules...need advice!

[Jacey]

I received my reaffirmation papers for one of our cars from Chase via our lawyer's office. I'm supposed to fill them out and sign them, but they make me uncomfortable. Here are my issues: 1) The market value of the car is significantly higher than the one I used from KBB in valuing the car for exemption purposes. If I sign these forms, am I getting myself in trouble with the exemption value? 2) I have made sure that I have negative income on my schedules, so I can't fund a 13. How now do I explain that I really can afford the car payment? That seems very contradictory, and I have to provide an explanation on these forms...it seems that my lawyer would want to have some input on the answers I give. I am planning on using the exempt portion of my tax refund to pay off this car, but I don't think I should do that until we finalize numbers with the trustee. I also need that car payment in my expenses or I'm afraid I'll get pushed to a 13. (Had my 341, but it was continued until he reviews tax forms to see how much of my refund he should get).

[SunshineGal]

Hi Jacey,

I don't know what to tell you about the value, but I would NOT pay off your car until your case is closed. As for the payment, we also showed negative on the schedule J but the attorney noted that we would budget the difference from other areas. (medical, food, clothing, etc.)

Good luck.

[justbroke]

1) The market value of the car is significantly higher than the one I used from KBB in valuing the car for exemption purposes. If I sign these forms, am I getting myself in trouble with the exemption value?

Reaffirmation basically keeps your contract the same. I have never seen them reduce it to "current market value". If the loan (debt) was more than 910 days old (or a refinance), you could redeem it at current market value. If you are that much underwater on the car, I don't know why you're reaffirming to start with. Perhaps sitting down and re-evaluating the situation is appropriate.

2) I have made sure that I have negative income on my schedules, so I can't fund a 13. How now do I explain that I really can afford the car payment?

You say that you're going to tighten the belt some more? LOL. This is why most reaffirmation agreements are marked with "hardship" and many Judges won't approve them anyhow. Many lawyers become hesitant to even sign them. You basically have to swear that you'll find a way to pay the bill, because you are technically saying that this is non-dischargeable debt and the lender is free to sue me if I mess up.

[Jacey]

I'm not underwater at all. I owe $2,745 on the car and the KBB private party value is $15,400ish. (that's a joke...I could sell it for maybe $9,000?) The reaffirmation paper from Chase values it at $18,500, which is hilarious. Clearly I need to keep the car, and it's scheduled to be paid in full in 10 months even if I don't pay it off with my tax return. I just don't want the trustee to say "Oh, you only valued the car at $15,400 but then signed a reaffirmation that it's worth $18,500...clearly you're hiding equity." This seems like an invitation to an argument with a trustee, which I would like to avoid at all costs.

[justbroke]

The Trustee could inquire anyhow. The Courts (and Trustee) generally use KBB/Black Book values for Retail and Clean (Average). I don't see any issue. The Trustee (and Court) understand that debtor "valuations" are not a legally substantive valuation. That's why they go by the book and use clean retail. At least in Florida, they use clean retail.

[despritfreya]

As it relates to the alleged value of the vehicle, here is what I do to the Reaff before I send it to the client. . .

Where is states "current market value", I write in "according to the creditor" and I then initial the change. You can do the same thing.

Des.

[justbroke]

I love it Des!