Returning the car to the bank

[itsybuggy]

Hello everyone. We got discharged in February of this year. Neither one of our two cars were reaffirmed, but we are still making payments on both.

We had reaffirmation hearing on one car, financed thru Toyota financial, and it was denied upon our request, but judge advised us that if we want to keep making payments they can not take the car back. She also stated that loan will be discharged in bankruptcy and if we decide to give up the car we may do so without owing anything on the loan.

On the second car financed thru Wells Fargo, we never had a hearing. Our lawyer claims that they never replied to reaffirmation paperwork. Our online access to bill pay with this car loan was never cut, so we still can make payments on this loan online, unlike the rest of our accounts we kept. Lawyer advised us that we can still return the car, even though there was no affirmation hearing of any kind.

I wanted to ask if this is true, because that is the car which gives us trouble after trouble, and being post BK we can not keep paying for all these expensive repairs.
If it was listed as an asset, but never had reaffirmation hearing, was it still included? I never checked our credit history to date.

[LadyInTheRed]

What the judge told you is true for both cars and would be true even if the reaffirmation hearing had never happened.

If neither loan was reaffirmed, your personal liability was discharged. If you stop paying, all the lender can do is repossess the car.

[itsybuggy]

Thanks for your reply. I just checked all three credit reports and it seems that both cars were included in bankruptcy. It also shows that my Sallie Mae loan was sold to another company, which makes me unhappy. I hope i won't have any problems with new people.

[btbeme]

Many - most? - judges in AZ take the stance that if you applied for the reaffirmation - regardless of the outcome - you are protected from any attempt to seize the property as long as you pay. Most finance companies are toeing the line on these decisions, as running afoul of a BK judge is tantamount to placing themselves under the wheels of the bus.

Which means that you are pretty much in the drivers seat here. Want to return the car? After discharge, call the finance company and tell them where they can pick it up. Leave it unlocked with a note to knock on the door and ask for the keys. Until such time, it is yours to drive. Be aware that any undue damage to the vehicle might be claimed; however, a note from your attorney will likely tamp down any further claim of liability for a vehicle you made reasonable attempts to return. Also, realize that if you drive an unpaid vehicle to the mall that it might not be there to take you home.

[AngelinaCatHub]

In the case of your lemon car, I would use it as long as you can, once you stop payment on it. Be sure to keep up the insurance on it, and do notify them (in writing). Don't be afraid to use it as it is still yours until the pick up occurs. 'Hub

[Bell30656]

Cat, just out of curiosity would you keep anything besides liability on the vehicle? I didn't reaffirm my Ford Conversion van (14 mpg was a good reason not to) and they never came and got it. Right after the discharge I changed the insurance to liability only. I'd already quit making payments several months before. It doesn't fit in a garage so it sits outside. The lender sent me a few letters and called me once or twice but they wanted me to bring it to them. After I recovered from laughing so hard, I told them it is in the driveway, feel free to send the towing company of their choice to get it at their expense.

To this day, it sits in the driveway. I drive it whenever I need to and it still works fine. I'm pretty sure they won't be coming to get it but one day they may surprise me. I may not be able to sell it because I don't have a clear title but as long as I keep it insured and plated I can drive it until the wheels fall off. We took it to Walt Disney World one trip and we often use it to haul around the gaggle of 9-year-old girls my daughter hangs out with.

Psst, with the high price of gasoline... my recommendation would be to stop paying on it. Be sure to not leave anything in the vehicle and keep it really low on gasoline. It would suck to have it repossessed with a full tank.