Reaffirmation and Arrears

[SemiSpook]

Got a call from my lawyer yesterday. Said the lienholder on our car won't reaffirm our note unless we are current, but we were shut out of our account after we filed our petition. Would like to reaffirm, but need to get the missing month put on the back end (we're only one month behind, technically) or spread out. Kind of weird to me that they would put such a stipulation on the note when we were shut out to begin with.

Weird part is our lawyer gave us the OK to talk to the lender about this. Personally, I'd like to have him in on the call when I make it.

Thoughts? Suggestions? War stories?

[justbroke]

Your lawyer doesn't want to talk to them, because it costs him time that is probably not included in your fees. Besides, trying to get a lender to reaffirm when you're past due is tough, although not impossible! Does your lender even require a reaffirmation? Some auto lenders don't require a reaffirmation so long as you are current.

This deserves some more background. The major reason that they don't reaffirm a delinquent account is because it complicates any repossession effort. Additionally, they would technically need to make the account current, through a modification, in order to have the reaffirmation approved by the court. The court can't allow you to reaffirm a debt when you are already behind in payments... since this would be a hardship right out the gate. That runs contrary to the "fresh start" that a bankruptcy discharge is to provide the needy debtor.

In the end, none of what you posted is weird, strange or even out of the ordinary.

I would have hoped that your attorney explained to you thoroughly that after filing, you are still liable to make payments on secured debt that you intended to keep. To stay current, you could have mailed in the payments or had a BillPay service send in the payment. May I ask what happened to those payments? I would hope that you saved those payments and could readily bring the account current. If you were already paying late (15-29 or more days late) then you were already having trouble with the payments.

[SemiSpook]

Basically, I'm just sitting on the payment, not that I intended to get behind or anything like that. I had been paying EFT and got locked out of the system that gets them my payment INSTANTANEOUSLY. I have the funds to make up the difference, just confused as to why they're holding back.

Then again, my lawyer DIDN'T mention keeping current to us when we filed. We were on the fence with the reaffirmation to begin with, and decided to do so after that Ford case came in. Must have been a lapse on his part, or in his experience (from the sound of it), the creditors were reasonable about shifting 1-2 missed payments to the back end. Just seems asinine, that's all.

[justbroke]

Well, as you have probably been reading, Ford is the absolute WORSE creditor when it comes to reaffirmations and ride-throughs. They require them or they will repossess. They do not negotiate and don't care. The feeling is that Ford Motor Credit (FMC) does this to send a message to all debtors. That's why they are so aggressive.

[SemiSpook]

Thing is it's not FMC, it's a regional dealership's financial group. And the loan itself was one of those "second chance" loans that didn't require a credit check. It's already been 11 days since my 341, so I'm not sure of what the next step is: negotiate to reaffirm, suck it up and pay up front, or explore other options, like a 722 (even though the trustee has already filed a notice of non-distribution in my case, as we're covered by our exemptions on everything).

[justbroke]

You can do a 722 Redemption still. You really need to sit down and evaluate your entire financial picture. A reaffirmation agreement MUST be entered into prior to discharge (signed, but not necessary "filed" with the court). It may also require a hearing. It's a financial decision that you must make for yourself.

A 722 Redemption loan will have a high interest rate. Additionally, it "appears", from my little knowledge of your case, that you purchased this vehicle less than 910 days ago. That would make a 722 Redemption loan, useless UNLESS you are paying over a 24% interest rate already.

[SemiSpook]

Well, I'm already at 24.99% on the note, but have some equity in the car (that was before the missed payments). Working with my lawyer now to sort out the mess. This sort of goes back to the SOP a lot of places follow when someone files (that being revoking access). Want to make sure I make my payments and have the latest info on what's going on, but this was just a total blindside.

[SemiSpook]

Quick update, just bit the bullet and paid up for the two months delinquency (well, more like 1.5 since they were already lumping my Sept payment in). I should be good to go IF I can get October in on time. I'm hesitant to go in on their bi-weekly plan to ensure not missing anything else, especially since we're planning to do a trade in here around New Year's. Just a bit of irritation, nothing more. Now, had I waited until this Friday (7 Oct), then I'd have been screwed (that was when the 30 day stay lifted post-341). Oh, well. Just so long as my wife has a car, that's all that matters.

[Nufsayd]

Has anyone had any recent experience with NAVY FCU and re-affirming their car? I am of the mind set not to re-affirm with them because I have a cc and personal line of credit with them. And from what I heard, they will try the tack on the balances of both of those accounts in order to reaffirm the car. If that's the case they can have the car :-(

[justbroke]

You could always ask them to remove the cross collateralization. Whether they do this or not, is another story.

[Nufsayd]

Yeah I know justbroke...but from what I hear they are a stickler for this...and play hardball!

[IamOld]

For whatever it's worth...my atty HATES NFCU...if you're late, they will make your life a living hell - my atty HATES them...and by the way - needless to say you need to - if you haven't already done so - move ALL your $$ from them if you still have your checking, etc. with them because they DO cross-collateralize...

Has anyone had any recent experience with NAVY FCU and re-affirming their car? I am of the mind set not to re-affirm with them because I have a cc and personal line of credit with them. And from what I heard, they will try the tack on the balances of both of those accounts in order to reaffirm the car. If that's the case they can have the car :-(

[Nufsayd]

For whatever it's worth...my atty HATES NFCU...if you're late, they will make your life a living hell - my atty HATES them...and by the way - needless to say you need to - if you haven't already done so - move ALL your $$ from them if you still have your checking, etc. with them because they DO cross-collateralize...

Oh yeah!!!....I haven't had any direct deposits with them for over 2 years...just have car loan, cc and line of credit. When my attorney called them last Friday to give them my case# and let them know she was representing me...they asked her "Does she plan to re-affirm her car?
My attorney informed them she will let them know...

[IamOld]

Oh yeah!!!....I haven't had any direct deposits with them for over 2 years...just have car loan, cc and line of credit. When my attorney called them last Friday to give them my case# and let them know she was representing me...they asked her "Does she plan to re-affirm her car?
My attorney informed them she will let them know...

Yes, because if you don't, they'll be hell to deal with...

[Nufsayd]

IamOld....I am leaning towards not reaffirming my car...cuz I know that they will try to tie the balances of the cc and line of credit to the balance of my car....NO WAY JOSE!!!!