Make extra payments on auto Loan Prior to Discharge

[forest007]

I just had my 341 on Friday 8/24/12 (yesterday). I am reaffirming my auto Loan. Can I start making extra payments on the loan to pay it off early or should I wait until after the discharge?

Thanks

[AngelinaCatHub]

First of all, why reaffirm? Just pay through as you are binding yourself to a debt. If things get worse and you just cannot make another car payment you have bankruptcy protection by not reaffirming. Don't give that up. Also if you have that much extra money it might not look to good to a Trustee. It would be like incurring more dept without permission of the Court. Chapter 7 is a liquidation so I'd advise you to wait. 'Hub

[pamkev]

I agree with Hub

[forest007]

First of all, why reaffirm? Just pay through as you are binding yourself to a debt. If things get worse and you just cannot make another car payment you have bankruptcy protection by not reaffirming. Don't give that up. Also if you have that much extra money it might not look to good to a Trustee. It would be like incurring more dept without permission of the Court. Chapter 7 is a liquidation so I'd advise you to wait. 'Hub

The reason why my lawyer advised me to reaffirm is because the car is worth about $14,000 (been paying for 5 years) and I only owe about $5,000 on it. I've already signed the papers. I want to get this paid off asap by adding an extra $100 per month to the regular payment that is due but if I need to wait I certainly will. Are you saying I should wait until after the discharge to make extra payments or after case is closed?

Thanks so much

[AngelinaCatHub]

The reason why my lawyer advised me to reaffirm is because the car is worth about $14,000 (been paying for 5 years) and I only owe about $5,000 on it. I've already signed the papers. I want to get this paid off asap by adding an extra $100 per month to the regular payment that is due but if I need to wait I certainly will. Are you saying I should wait until after the discharge to make extra payments or after case is closed?

Thanks so much

The discharge is the magic bullet, but the close is soon after (usually). Paying above what you normally do changes your time stamp of paperwork. It probably would not be noticed or objected to, but why take a chance hen you are so close? Make the regular payments and once closed add the extra money on the next payment. I understand the reaffirmation so as to keep you from becoming an asset case. Probably the Trustee would not take it as it is still encumbered for five grand. 'Hub

[forest007]

Thanks! I heard the trustee tell my lawyer it was a "no asset case" at end of the 341 meeting. My lawyer repeated it to me as we were leaving and said that that was what she wanted to hear.

Thanks for your advice! Can't wait to do the dance....