Question Dealing with car accidents and reaffirmation agreements.

[skating102]

During my Chapter 7 filing I signed a reaffirmation agreement with my credit union to retain my car. The court date to approve that reaffirmation agreement is in February however I just totaled the car in a car accident.

How does this all play out? I want to continue the reaffirmation agreement with the Credit union to stay in good standing with them but the car is totaled. Is there paperwork that needs to be filed since the reaffirmed property is now destroyed? If I get a new car financed through the credit union do I need to do a new reaffirmation agreement since the property has changed?

So confusing...and of course I filed pro se!

[MSbklawyer]

If you reaffirmed with your credit union, you are back on the hook -- personal liability -- for the debt on the car, just as if you had never filed bankruptcy. But you have 60 days to rescind you reaffirmation agreement. If there's still time, you may want to think about that.

[helpmeout]

During my Chapter 7 filing I signed a reaffirmation agreement with my credit union to retain my car. The court date to approve that reaffirmation agreement is in February however I just totaled the car in a car accident.

How does this all play out? I want to continue the reaffirmation agreement with the Credit union to stay in good standing with them but the car is totaled. Is there paperwork that needs to be filed since the reaffirmed property is now destroyed? If I get a new car financed through the credit union do I need to do a new reaffirmation agreement since the property has changed?

So confusing...and of course I filed pro se!

You should know before the hearing how much you will get for the totaled car. I didn't reaffirm mine (and I am very glad I didn't even though it turned out well) and totaled it. Fortunately, it was worth enough that the insurance paid off the loan with a little left over.

You really should rethink reaffirming the vehicle. Just to stay in good standing isn't going to help you get back on your feet. And it isn't going to get you a lower interest rate with the credit union.

[ValleYum]

Skating? Do you have cross-collateralization issues with your Credit Union that you are concerned with?

My ex totaled a car once and our insurance company and bank simply did a "collateral substitution" ie: they found an identical make and model (the color & mileage were different) of the vehicle that was totaled - but we weren't in a BK at this time.

Good luck with whatever you do!!