MUST I reaffirm a vehicle I wish to keep?

[BrokeTwinkie]

We have to cars that we intend to keep, and both banks (Capital One Auto Finance & Mazda Capital Services (aka: Chase Auto Finance) have sent reaffirmation agreements to our attorney. We are current on both payments. Can we simply retain the cars and continue to make timely payments? Or is it compulsory to reaffirm in order to keep the property?

Personally, I would rather just keep the cars and continue to make regular payments without reaffirming. One of the cars in particular is prone to expensive repairs, and in the event that the car becomes "unaffordable" in the future, I would like to have the option to "walk away", so to speak.

We live in Nevada.

Thank you for your input.

[despritfreya]

These are questions for your attorney since he/she knows how such issues are handled by the judges in your district. . .

In general, the Bk Code requires you to act on your intentions therefore, if you do not execute a Reaffirmation Agreement for the vehicles within 45 days of your 341 meeting the protection of the automatic stay lifts and the creditor most likely can repo regardless of the payment status. There is nothing in the Code that requires approval of the agreement by the judge. As a result, many judges will not approve the agreement once it is filed with the Court. This gets around the problem created by the Code. Ask your attny if the judges in your district routinely deny the agreements. If the answer is "yes", there should be no problem with at least following through on your intentions and executing the agreement.

Des.

[ccmisery]

I have done two, both with Ford Credit, if you do nothing with them they will repossess the car even if your current on payments and sometimes with no notice. From what I read, neither of the creditors you have will require reaffirmation, I am sure though that Mazda was one, but you said its' not Mazda Credit so maybe not an issue.

If you do not have to reaffirm then don't, the only advantage is the creditor may offer lower rates if you do, Ford did not offer me anything different.

[Kristy12]

How much do you owe on the cars? Can you redeem them with the bank for the blue book value, if that value is lower than your redemption of the loan?

[ccmisery]

The is leased with less than a year to go, the other is financed, a few months ago, and I do not have any equity in it yet.

I do not know how that works, I only read that sometimes if you must sign a reaffirmation agreement and the court approves it, you may be able to get a lower APR rate and etc.

[btbeme]

While you cannot be forced to sign a reaffirmation, the history is pretty clear that you are accepting the lender's terms which may mean repossession. However, as Des points out (and I have seen many time over) judges in some areas are becoming less supportive of these "offers you can't refuse." One BK judge in particular that I know has openly admonished creditors that they will be held liable if the debtor enters a reaffirmation agreement that she will immediately deny as a matter of course - if the creditor tries to repo, she will hammer them. This interpretation of the law reads that the debtor's agreement to enter the reaffirmation is the protection; the judge can (and many do) refuse the reaffirmation, leaving the debtor with the protection and the creditor with no legal recourse to repossess unless other cause (defaulting on payments, etc) is shown.

This interpretation has not been widely tested but is getting more popular, and it seems to have teeth with the affected creditors. But, as above, it depends on the district and the judges at this point.

As for getting a reaffirmation approved and getting better terms...that is entirely up to the lender, but many seem willing to play ball. Reading your last post more closely, it seems like you have two vehicles, zero equity, a repair problem, and for some reason you hope to keep them? Or are you OK with skipping the reaffirmation and buying something for a couple thou that rolls fairly straight and using that for a year or two?

[stevie2012]

In my case, I've had my car for 2 years - never late. They (Suntrust) required the reaffirmation or they were repo'ing my car.

[stevie2012]

Oh and my terms stayed the same ---- but they wanted it written as to HOW I will be able to afford the car since my disposable income is in the negative.

[keepmine]

Oh and my terms stayed the same ---- but they wanted it written as to HOW I will be able to afford the car since my disposable income is in the negative.

I'm surprised your lawyer signed off on it.

[stevie2012]

I'm surprised your lawyer signed off on it.

She did and so did the trustee. Otherwise, I had to give up the car. And well, trying to get a car at 3.99% financing really isn't an option when my FICO is now at 420.