reaffirmation agreement or NOT?

[Hopefull1983]

I know there's a million plus posts about this, but I need some help. I filed my CH 7 and am set for my 341 meeting in two weeks. I listed my intentions to reaffirm my auto loan in my petition. I'm currently two months behind on the loan and am thinking at this point I should just let it go.

Question:

1. Can I sit on the car until I discharge assuming the lender doesn't ask to lift the stay? Do I have to file any additional paperwork saying I've decided to include the loan in my discharge?

2. The lender just updated my credit report by posting the credit limit of the car to zero and now it just shows the balance due, but doesnt show any late pay marks. Does this mean anything.

3. My ultimate goal is to wait for discharge and then give the car back. At that point get a new loan which seems possible from what others have experienced.

[keepmine]

Assuming the lender does not file for relief from stay, you can hang on to the car. Just keep insurance in place.
As long as you've not signed a formal reaffirmation agreement, you don't need to do anything.

[Hopefull1983]

Assuming the lender does not file for relief from stay, you can hang on to the car. Just keep insurance in place.
As long as you've not signed a formal reaffirmation agreement, you don't need to do anything.

I contacted the lender about sending me a reaffirmation agreement. They sent this...

I have reviewed your income and expense schedules and I see that your expenses exceed your income and therefore the bankruptcy court would not approve a reaffirmation agreement under those circumstances because that would be considered a situation which creates what is known as an undue hardship. In addition, your account is now 61 days past due with a total amount due of xxxx. The account would have to be current in order for us to even consider extending a reaffirmation agreement and you would have to re examine your expenses with a view toward making adjustments in your spending that would bring your schedule J total to a positive figure. If I may be of further assistance please contact me at your earliest convenience."

They then sent...

"If you make your account current and stay current I will make an exception and place your account in a special list which will enable you to make what are termed “voluntary payments” as long as you intend to keep the vehicle. We will not be permitted to send you monthly statements but you can call in and make telephone payments, or you can mail a payment to us directly, The reason for this list is the fact that once a debt is discharged, which yours will be, we are no longer permitted to “collect” on a debt. We of course retain our security interest in the vehicle but we can’t make any attempt to collect on the debt so as long as you want to keep the vehicle and stay current and make the “voluntary payments” everyone comes out satisfied."

So at this point they are saying I need to make my payments current by Jan 11th 2014 or there is nothing they can do. Reaffirmation agreement is out of the question from what I see here. I'm not sure what to do. Stop paying and save the cash until they repo and get something new? OR Get current on this loan and keep the car through the BK?

[bcohen]

If you're already behind, and your schedules show negative income after all expenses are paid, I fail to see how you can afford to keep the car. Be smart and know when to fish and when to cut and run. This is one of those times when you have to cut and run. Do not pay another penny toward that car, but instead save your money to buy another car once this one gets repo'd. The lender probably won't bother paying to lift the stay, so you will get to drive the car--payment-free--until the case closes. Then, they will come pick it up.

[Hopefull1983]

If you're already behind, and your schedules show negative income after all expenses are paid, I fail to see how you can afford to keep the car. Be smart and know when to fish and when to cut and run. This is one of those times when you have to cut and run. Do not pay another penny toward that car, but instead save your money to buy another car once this one gets repo'd. The lender probably won't bother paying to lift the stay, so you will get to drive the car--payment-free--until the case closes. Then, they will come pick it up.

I think your advise is really sound, thank you! I'm just afraid that I wont be able to finance a junker once the time comes because I am writing off three vehicles in my BK and most lenders will probably laugh at me. I know there are a lot of great stories of people getting financed after, but I think my situation is one of the worst credit profiles. The BK law says that 45 days from the 341 meeting the lift raises and gives the lender the ability to take the car? That would be before my discharge and no lender will finance me until I have my discharge papers. Sorry for my dumb questions, I just have a lot of anxiety about this car situation.

[keepmine]

The lender will have to formally file for relief from stay and it be granted before, they can repo.
Nobody can tell you if they'll do this or not. Odds are, they won't.
Don't spend another nickel on the ride. Somehow, some way, post bk you'll find some financing.

[bcohen]

Do not worry about obtaining financing post-BK. As soon as I filed, my mailbox started filling up with offers from various dealerships ranging from legitimate ones such as Ford, Chevy, Toyota, Nissan to sleazy "buy here pay here" used car lots. Even now, more than 3 months after discharge, I get at least 3 or 4 offers in the mail each week.