Auto Loan Reported as Current

[chakman]

Hi All,

I am new to this forum. I have been a silent reader for almost a year now. I have one specific question that is bothering me a bit and would like to see what everyone thinks.

I filed for Chapter 7 , No Asset back in October of 2010 and was discharged in early February of 2011. My Auto loan is from Pentagon Federal Credit Union and they wanted me to reaffirm the loan. On the advice of my attorney I did sign the paper but my attorney did not . this is just to show the bank that I did intend to reaffirm and pay the loan yet , my attorney did not think of it as a good Idea and , thus, she did not approve it. The credit union still went ahead and filed the reaffirmation document with the court. The judge denied the reaffirmation since it lacked my attorney approval.

Fast forward to now, I still have the car and I do make my monthly payments always on time. Today I pulled my Credit report and found that the Auto Loan still reported as "Open", and Current. The credit union is still reporting month after month that I am current on the loan. My beleif was that the auto loan was included in the BK and has been discharged. So it should have been closed.

Now, my question: Is it advisable to dispute the credit buereaus and ask them to report teh loan as BK discharged? Would that help me raise my score ? Or just leave it as it is since I am making the payments and it does not hurt me as long as the CU reports it as current.

I have tried to research on this issue and have not been able to get anywhere. I know i have the denied reaffirmation document and I can successfully dispute the CBs report. Also I know I do not owe anything the CU if I decide to turn the car in. However, since the car is only three years old and is still in good condition and I do need something to get around, I like to keep it until it starts giving me problem.

I would greatly appreciate any thoughts and suggestions.

[chakman]

88 views and not a single soul replied. Lord have Mercy on me !! I thought I was home with bunch of others that have gone through similar financial crises in life...

[debee]

Hi chakman,

Perhaps the 88 are all at the beginning of the journey.

Did you actually attend a reaffirmation hearing? Something doesn't sound right.

When it comes to credit unions, your attorney doesn't have to sign off on the agreement. Once you sign it, so long as you were represented by an attorney during it's negotiation (even if she refused to sign it) and the creditor files it with the court, it gets entered.

Unless something really extraordinary happened in your case, there would be no hearing and no judicial denial. Once you sign with a CU, you're reaffirmed. The presumption of undue hardship doesn't apply.

[AngelinaCatHub]

First 'Chakman', welcome. Next, understand, there are more viewers than contributors. You said you were a long time viewer. So, give us a break.

Now to business. How many times do you wish to shoot your foot? Leave that very good credit report alone. Your lawyer was right not to let you reaffirm. You have the upper hand in that you can keep your car if wished, but if not, you would not be penalized at anytime that you gave it up. Best of both worlds. A reaffirmation would hang you to that car or a Judgment if repoed. Are you wishing to make your credit report less well than it is now? Anyway, hang around. Others will chime in, in time. 'Hub

[btbeme]

I think everyone filing a Ch 7 ought to have this problem...

Hey, simply said, a loan showing Current and Paid As Agreed on a credit report is about as good as it gets. In this case, it is well deserved - you are current and paying as agreed. Congrats!

[IBroke]

Chakman, you have the best of both worlds: A non-reaffirmed loan reporting without any BK-notation. This is as good as it gets - I know that because I was just as fortunate as you on my own auto-loan. I wanted to reaffirm but the lender didn't bother to set up an agreement. I told them that the reporting would be crucial for me and they simply kept on reporting it.

FYI: Accounts reporting as "IIB" are BAD for your score - at least compared to the effect of a current, non-BK account. The only time you want an account reporting as IIB is if it is derogatory already and an IIB and $0-reporting would be an improvement. You already have the best reporting possible sooooo...hands off!!

Also, once paid off, this account is going to do you a HUGE favor when applying for your next auto-loan. What do you think is preferred by potential lenders? An account showing all your payments or an IIB-account, showing you "ran away" from your responsibility to pay? That may sound a bit harsh but that's EXACTLY how the lenders see it - although you actually kept your promise to pay. But how should a potential lender know if it's reported as IIB?

[Dorsey]

But what of debee's comment? I too thought that the credit unions have a special disposition in the law that prevents a judge from denying a reaffirmation of a secured credit union loan, i.e. that once the reaffirmation is signed it's done.