Wanting to file pro se but unsure about a debt with a co-signer

[sungazer82]

Hi everyone,

I've done a lot of homework on how to go about filing a pro se case and feel that this is the right thing for me and while my case is, for the most part, relatively straightforward, I do have an issue I'd appreciate some feedback on.

Most of my debt is unsecured. My wife and I share a car loan which I plan on filing a reaffirmation agreement on, as well, we are cosigners on an unsecured loan with our bank. Now, I realize that reaffirming an unsecured loan is atypical and probably discouraged, but I want to ensure the bank doesn't come at her with threats of a lawsuit, wage garnishment, etc. Plus, I want to remain in good standing with our bank.

Getting the reaffirmation agreement approved for the car loan I'm not particularly concerned about but I am concerned about reaffirming the unsecured loan. Do any of you know if judges are sympathetic to reaffirming unsecured loans when the primary reason is to protect the non-filing spouse?

Thank you for any and all input.

[justbroke]

If you are filing Pro Se, then you'll need a hearing scheduled to reaffirm any debt. Generally it's a bad idea to reaffirm any debt which you don't need to reaffirm. For example, in some districts you don't need to reaffirm a vehicle in order to keep it (stay and pay). I do not know if Tennessee offers the "stay and pay" option for motor vehicles. Also, because you are Pro Se, a judge is likely to deny reaffirmation and allow you to keep the vehicle and pay (stay and pay).

However, there are some instances where reaffirming is okay in your situation. According to the Florida Bar, you may want to reaffirm where (a) to protect a "co-debtor" or (b) the creditor gives you something of value in return for the reaffirmation.

• So let's deal with the vehicle. You would mark it as "reaffirm" on the Statement of Intentions (SOI) and the lender "may" give you a reaffirmation agreement. Because you are Pro Se, you must remember that this is your time to negotiate. Try to negotiate a lower interest rate for the reaffirmation so that you're getting "something of value in return" for that reaffirmation. The lender may be disinclined to acquiesce to such request since there is a co-debtor whom they could go after. But it's worth a shot. This will still end up in a reaffirmation hearing because you are Pro Se.
• 
  Now about the unsecured loan. You would mark it as "reaffirm" on the Statement of Intentions (SOI) and then make sure the lender gives you a reaffirmation agreement. It must come from the lender. You may need to prod them for a reaffirmation agreement for unsecured debt since this is not common. Again, The lender may be disinclined to acquiesce to such request since there is a co-debtor whom they could go after. But it's worth a shot. This will still end up in a reaffirmation hearing because you are Pro Se.

You mention you want to stay in good graces with the bank. May I ask if this is a credit union (CU)? If it's a CU you'll have the cross-collateralization issue anyhow between the loan and the vehicle.

Please know that this is not advice but more of what you can expect. In your case, and especially with VOLUNTARILY signing up to repay an unsecured debt, negotiate a new rate, terms, or something else of value.

[sungazer82]

Thank you for your response, justbroke. It was very helpful.

In regards to the bank question, no, this isn't a credit union.

I have a couple of questions I'd appreciate your input on. It's my understanding that filing Chapter 7 only affects my credit and not that of my spouse, even though she is a cosigner for the personal and car loan. Is that correct? Are there any instances where her credit could be affected even though she's a non-filer?

Second, my wife has a job but I'm on SSI. Do you know if my SSI counts for the calculation of the federal poverty guideline? I'm asking because I'd like to see about getting a fee waiver but am unsure if my benefits count for household income.

Thanks!

[justbroke]

I would not "stay in the good graces" of any bank unless it's a cooperative, such as a credit union. There are 0 reasons to stay in the good graces of Bank of America, Citi, or even any regional or local bank. Credit unions are special since they are member-owned and I could see being good with them. But trust me when I say this, a regular bank will blacklist you from credit products for having filed bankruptcy. Credit unions are much nicer and is why people would want to stay in the good graces of that type of bank.

I digress.

Yes filing would only affect your credit unless your co-debtor does not continue paying.

As for income for purposes of the waiver, I would tend to believe that the definition of "income" used on the form is the common definition (and not the bankruptcy "CMI" definition). I say this because the form instructs the debtor to even include "non-cash governmental assistance" in the calculation.

I have never requested a waiver so I can't speak from experience. Remember it's 150% of the poverty level. However you may want to see if you have a Pro Bono or Pro Se clinic at your bankruptcy court that can directly answer that question. Since you intend to file individually, you may be able to exclude some or all of your spouse's income when making this specific calculation for this waiver form.

[sungazer82]

Thank you again for your help.