Reaffirmation Hearing

[InDebt2]

Because I am pro-se in in the central district of California I must attend a reaffirmation hearing in order to get the reaffirmation on my agreement for my car loan approved by the judge.

Has anyone actually been to a reaffirmation hearing? How do these go? I am a little nervous because my car was bought for $26000 5 years ago and I refinanced it a couple of times, my payment was about $500 per month. When I went to the credit union to renegotiate for the BK reaff, my new loan amount is now $12000 and payments will be $250, which is half and will be very affordable with post-bankruptcy. There is no presumption of undue hardship.

The negative part is that when I looked up car in blue book value my car is only worth about $6000 (which I did claim as an exemption on my forms), however on some of my research I found that judge's tend to frown upon signing the reaff agreement when the value is less than the loan. My car is very reliable, it has cosmetic defects, which lowered the value, but otherwise it has never given me any mechanical problems, and I want to keep it until it quits running before I ever buy another car.

Sorry for the long-winded post, but my 341 is coming up within the next week, and this reaff hearing as soon as I file the motion for the hearing and I am getting nervous so, a) what has anyone else's experience been in a reaff hearing and b) will the value to loan problem hurt my chances that the judge will sign the agreement, even thought there is no presence of undue hardship?

THANKS ALL!

[justbroke]

In general, Judges frown upon these especially when the value is far less than the balance on the loan. Any judge would consider a car that is underwater by 50% te "not in the best interest" of the debtor, and not sign the re-affirmation.

Hopefully, your Credit Union will allow you to do a ride-thru. That way, you can keep paying and keep the car. I am still hesitant to even provide encouragement to pay $12,000 for a $6,000 car.

I haven't had a reaffirmation (Chapter 13) but there are several folks on this board that should be popping in to tell you how theirs went.

[keepmine]

http://www.georgiabankruptcyblog.com/archives/miscellaneous-cases-arizona-bankruptcy-court-ride-through-still-available-for-secured-debts-after-failure-of-timely-filed-reaffirmation-agreement.html

[justbroke]

While the 9th Circuit does have the "ride-thru" option, far be it for me to encourage a person to keep a vehicle that is worth 50% of what's owed on it. If we were talking $2,000 versus $1,000... so be it. Alas, we are talking $12K owed versus the value of about $6K. I just don't know why someone would throw $8K away. (Noting that my $8K value is "net present value" (NPV) and is based on the cost to finance $6K... which you are totally throwing away).

Of course, this is only my opinion.

[keepmine]

While the 9th Circuit does have the "ride-thru" option, far be it for me to encourage a person to keep a vehicle that is worth 50% of what's owed on it. If we were talking $2,000 versus $1,000... so be it. Alas, we are talking $12K owed versus the value of about $6K. I just don't know why someone would throw $8K away. (Noting that my $8K value is "net present value" (NPV) and is based on the cost to finance $6K... which you are totally throwing away).

Of course, this is only my opinion.

I agree with you. I wouldn't reaffirm it either.

Just trying to answer the posters question.

[justbroke]

Just trying to answer the posters question.

Understood, and that information was on target. I was just adding that even given that the ride-thru is available, keeping the asset may not be "worth it".

As a matter of fact, a combination of doing the ride-thru and not keeping it may be on target. That is to say, that perhaps they keep if for a few months as they save up money to purchase a (reliable) used car.

[InDebt2]

I'm a single mom and I have no savings and of course no credit to purchase a new or used car at this point. I have a job where I need my car to get to it and get to my clients when I have out calls. I bought my car brand new and have kept in excellent mechanical shape. I have no second car, no spouse or parents to help me out and two kids to get to school. I feel I have no option but to keep the car I have right now in order to get to work and transport my kids. If the judge does not sign it, I will just have to deal with whatever comes. I would prefer the judge sign it, so the credit union will honor the lowered payment (they won't do it until the judge signs the agreement since I am pro-se) and I can just go on with my life. No signature means paying the larger payment on ride-through to keep the car.

[justbroke]

No signature means paying the larger payment on ride-through to keep the car.

I'm not saying doing the ride-thru and paying $12K for a $6K car is not worth it. I just don't recommend it... usually.

In your case, you don't have any choice. The cost, which I calculated as $8K (at net present value), may actually be worth it in your case. It allows you to earn income, so that may be worth the $8K over the 3 years or so it will take to pay the car off.

So, in your particular case, given what you just posted... I could see riding through on the car. I probably wouldn't reaffirm, but certainly a ride-thru is good.

[Gary]

There is a great video about this here the judge talks about a vehicle reaffirmation on a vehicle good info watch it http://bit.ly/gXgNj

[justbroke]

There is a great video about this here the judge talks about a vehicle reaffirmation on a vehicle good info watch it ..junk URL removed...

This is not even a Judge in a real case. This is acting. Notice... no attorneys. There's also no courtroom clerk.

It is informative, but it's too much advertising for me.