Another budget question re: auto reaffirmation

[APL]

I thought I remembered reading somewhere that after you prepare your budget, if there isn't a certain amount of disposable income left the Trustee will not approve your reaffirmation as it would be considered a hardship.

My atty just prepared my budget for me (and I would like to think it is because he is trying to be helpful), but the numbers just aren't right.

His budget also left me with about $50/mo left after all my expenses. Will that hurt my chances of reaffirmation?

[LadyInTheRed]

It's not up to your trustee whether to approve a reaffirmation agreement. If your attorney certifies that the reaffirmation does not impose an undue hardship, the reaffirmation agreement is effective if it is filed before discharge and you do not revoke it. (see bankruptcy code section 524(c)) If your attorney is unwilling to certify that a reaffirmation agreement does not impose an undue hardship, you would have to petition the court to approve the agreement. But, I don't know how likely you are to convince a judge to approve a reaffirmation if your attorney won't sign a certification.

[APL]

So the first thing i need to do is ask my attorney if he is willing to certify the reaffirmation?

Does the reaffirmation paperwork happen before or after the filing? If after filing, does it happen before the 341?

[LadyInTheRed]

So the first thing i need to do is ask my attorney if he is willing to certify the reaffirmation?

Yes.

Does the reaffirmation paperwork happen before or after the filing? If after filing, does it happen before the 341?

It happens after the filing. You and the creditor have to enter into a reaffirmation agreement which gets filed with the court anytime before confirmation.

Why do you want to reaffirm? Why not just keep making payments?

[APL]

Why do you want to reaffirm? Why not just keep making payments?

I'm afraid if I don't reaffirm, that one day they will come and take my car away. Doesn't the reaffirmation protect my car?

[LadyInTheRed]

A reaffirmation protects the lender more than anyone else. They are not likely to take your car if you stay current on payments (but it has happened). They'd usually rather have the money than the car. Check the loan documents to see if the discharge of the debt in BK is considered an event of default. Also, ask the lender what their policy is. You should definitely talk to your attorney about this.

[jetsfan2010]

A reaffirmation protects the lender more than anyone else. They are not likely to take your car if you stay current on payments (but it has happened). They'd usually rather have the money than the car. Check the loan documents to see if the discharge of the debt in BK is considered an event of default. Also, ask the lender what their policy is. You should definitely talk to your attorney about this.

I agree with this. My attorney told me the mistake many of his clients make is not proactively letting the lender know they intend to keep the car, make payments before they file. Then they get surprised when the lender decides to pick up the car.