Is Reaffirmation of Auto's req'd in Florida??

[KnOmom]

We have two auto loans with USAA bank. We filed Chapter 7 on 10/28/11. Our lender sent reaffirmation agreements to our attorney for us to sign.

I asked my attorney's advice on signing them and he said that the reaffirmation's are now required by law and if we don't sign they will take the cars.

I called the bank and the gal in the bankrupcty dept says they will not take the cars and the reaffirmation's are merely only an offer to stay in good standing with them and to rebuild our credit. I don't want to sign a reaffirm because of the obvious risks involved. But we want to make sure we keep both cars...Any advice? We are in the middle district of FL. I don't want to have our cars repossessed if we don't sign.

help!

[malf1204]

no you are not required to sign the reaffirmation agreement and as you have found out many lenders will let you keep the car as long as you make the payments and keep valid insurance. The loan will be discharged and if you cannot handle the payments in the future you can just let it go and they will repossess it with no cost to you to you. I signed the reaffirmation agreement and then requested a hearing at the hearing I told the judge I wanted to keep my car but not reaffirm it and he issued a Chimm Order that stated that the reaffirmation agreement was denied but that my lender could not repossess as long as I made the payments and kept insurance on the vehicle.

[SunshineGal]

Our attorney told us that FL law is quite clear on the subject on auto loans. If you do not reaffirm, the lender *can* repossess the vehicle. You don't have to be late on payments, and they don't have to file anything with the courts after discharge...they can simply come and get it at any time. Now, that doesn't mean the lender has to or even will come and take it. So, if you really want to keep the car than I would say reaffirm the debt, but only if you have equity, don't reaffirm if it's upside down.

[malf1204]

The Bankruptcy Law in Florida is no different than the BK law in any other state it is a FEDERAL law. That said your attorney is wrong. Your lender told you they will not repossess. Can they? Yes. Will they? They say "No". There is no benefit to entering into this agreement. If you do and lose your job or the self-destructs you will be liable for the loan and fees and no it will not help your credit the account is still listed as IIB. Depending on how much you owe you can redeem one or both cars for current value even if it is less than loan value.

[KnOmom]

The Bankruptcy Law in Florida is no different than the BK law in any other state it is a FEDERAL law. That said your attorney is wrong. Your lender told you they will not repossess. Can they? Yes. Will they? They say "No". There is no benefit to entering into this agreement. If you do and lose your job or the self-destructs you will be liable for the loan and fees and no it will not help your credit the account is still listed as IIB. Depending on how much you owe you can redeem one or both cars for current value even if it is less than loan value.

both cars were purchased 8-9 months before filing our BK. This was part of our "preplanning". We are not upside down in either car. We actually have equity (on paper) at this point and time. well not sure what to do here. not really wanting to cause any issues before our 341 next week. So I might just put off signing them until after I see how the 341 goes.

[TBA]

We went thru the same thing with the same lender. I also had equity but decided not to sign until after our 341. We did this to determine just how much equity we had, and if it was worth keeping the vehicles. we ended up paying about 12k to keep two vehicles and some personal items. Had there not been enough equity in my cars to justify buying them from the estate, i would have just let them go.

We then got called to the reaffirmation hearing on the auto loan - took about 15 minutes - got the "you know you have these three options" speech, elected to reaffirm anyway, and are good to go.

GL with your decision.

[KnOmom]

TBA so did you attorney tell you that you had to sign the reaffirm's or lose your car's? I don't know what to do here. USAA tells us they will not take our cars, they don't want them. Our atty says we have to sign reaffirms in FL......or surrender......do you think we should bring this up with the trustee during our 341 next week or wait until the reaffirm hearing and ask the questions then? I don't want to do anything that may affect our 341 but I am not keen on the idea of signing a reaffirm. there is simply too much risk for the next 4 1/2 years and although today we have equity a few years from now we won't at the rate of depr for autos and they way our luck runs anything that can happen will.....for exm we bought a house last year that was built in 2007 and we have replaced, ac, appliances and now air handler...now our dog is sick and major vet bills....we have the worst luck in the world...

[SunshineGal]

The Bankruptcy Law in Florida is no different than the BK law in any other state it is a FEDERAL law. That said your attorney is wrong. Your lender told you they will not repossess. Can they? Yes. Will they? They say "No". There is no benefit to entering into this agreement. If you do and lose your job or the self-destructs you will be liable for the loan and fees and no it will not help your credit the account is still listed as IIB. Depending on how much you owe you can redeem one or both cars for current value even if it is less than loan value.

While the laws may be federal, not all districts, or even judges within a district, interpret them the same way.

See below:

Consequences Of Debtor Not Signing Reaffirmation Agreements For Car Loans and Leases

Chapter 7 bankruptcy debtors are required to reaffirm car loans in order to keep their car and their car loan through a bankruptcy. The bankruptcy code says that if a debtor does not reaffirm a car loan (or other secured personal property loan) the automatic stay is lifted as to that loan and the creditor can repo the car. In practice, there are varying consequences for a debtor’s inability or unwillingness to sign a car reaffirmation agreement. According to one prominent creditor attorney, if a debtor refuses a reaffirmation Ford Credit will repossess the vehicle even if the loan is current. GMAC will not repossess the car but will reserve its right to do so in the future at its discretion. If a debtor submits a reaffirmation agreement, but the bankruptcy denies the reaffirmation because the judge believes its not in the debtor’s interest, most lenders will not repossess the vehicle if the loan is current.

The reaffirmation of car leases is unclear. The bankruptcy code does not require reaffirmation of car leases, and the Orlando judges typically will not approve a lease reaffirmation agreement. The debtor can assume or reject leases, but the debtor does not "reaffirm" a lease, technically speaking. The major car lenders will insist that bankruptcy debtors sign reaffirmation agreements for car leases, but in this case, if the debtor refuses to reaffirm a lease the lenders usually will not repossess the vehicle if the lease is reasonably close to the end.

http://www.bankruptcyorlando.com/2009/03/consequences-of-debtor-not-signing-reaffirmation-agreements-for-car-loans-and-leases.html