Very overdue update and repossession

[SweetGeorgia]

Greetings, everyone! I haven't been hanging around as much, but you all helped me so much a few years ago that I thought I'd share a story.

We filed Chapter 7 back in July 2010. We reaffirmed our car loan, which was about 1.5 years old at the time. We'd never been late on it. I didn't make any payments during the pendency of the bankruptcy, because money was so tight and I figured they wouldn't repossess. As soon as we got our discharge, I made a large payment to bring it up to date. And I continued paying for a while, until I couldn't.

I was concerned at the time that I could not get any kind of accounting out of the bank (USAA). There were no statements, the loan was removed from our web portal, and they referred me to their attorneys (which would have meant calling my attorney) if I called. The loan isn't even on our credit reports. I was worried that the payments were going into a black hole. I didn't think my attorney would do anything and I couldn't afford to pay him anyway. So I figured, when they take the car, I will deal with it.

That was three years ago. I had no idea why they weren't contacting me or taking the car. I mean, they still had the lien so I couldn't sell it without paying them off. And I still had it insured through USAA, so they knew it was in good shape and exactly where it was. We paid for the insurance through a USAA bank account. I contacted them plenty. I never brought up the car, but I certainly wasn't hiding.

And they came and got it last night. I'm not outraged, just a little perplexed. Why now? I know I'm probably not entitled to any notice, but still. I think most people anticipating repo do not sit and wait for 3 years. I just thought my husband had taken it to work because the A/C is cold.

Actually, my first conversation with the bank totally confirmed my earlier fears about the payment black hole. They said my bankruptcy had just been discharged (no, 3.5 years ago), that the loan hadn't been reaffirmed (yes, it was), and that I had made payments of about $90 each month during and after my bankruptcy (what?). I'm about to call again (the BK department this time) and see what we can work out, but I thought y'all would be entertained.

[AngelinaCat]

If the bank thinks you didn't reaffirm, that is a GOOD thing. That means they won't sue your for difference between what you owed, and what the car sells for at auction.

You need to look at your paperwork very closely. It may be that you checked the 'intend to reaffirm' box, and never got the final paperwork, or the judge could have decided that reaffirmation was an undue hardship for you--and it obviously was, or you would have continued making the payments--and ruled against the reaffirmation.

In any case, you need to follow up on this and find out exactly what has happened. Do you still have your PACER account, if you had one then?

[SweetGeorgia]

OK, now what I'm worried about is that they'll try to have it both ways. I have a whole 9-page "Reaffirmation Agreement" which is filed on PACER. My husband and I went into a little room after the 341 hearing with our lawyer and some other guy and everyone signed it. It does say "presumption of undue hardship" at the top. I checked PACER, and there's no other reference to it in the record (is there supposed to be?).

The bank has certainly been acting as if we had no reaffirmation agreement. The representative says that the reaffirmation was "not approved" (by them, she implied). They "charged off" the loan 6 days after our discharge (the same day I made the makeup payment). They have not made contact with us, according to them, because all they had was the lien interest (and they could not take collection action, except for repossession). They gave me no notice before repossession because it's not required with an un-reaffirmed loan. There is apparently no delay before the car is auctioned off. All of this is on account of the non-reaffirmed status of the loan. Yet I haven't been able to get the "no affirmation" assertion in writing.

All they're asking for is the balance of the loan to get the car back. That's a little bit more than the blue book value of the car; still a good deal if I had it.

If I could force them to reinstate the loan by admitting the reaffirmation, that would be one thing. Do you think they might try to sue me anyway, based on the PACER record? I feel like I've already gotten the benefit of the deal (any deal); yet I'd like another day to refinance and get my stuff out of the car! At least it only had 1/8 tank of gas.

[LadyInTheRed]

It sounds like your attorney did not sign a declaration saying it was not an undue hardship to reaffirm. In that case, the judge would have had to approve the reaffirmation agreement after it was filed with the court. If your attorney did not certify it was not a hardship and there is no order approving the reaffirmation agreement, then there is no reaffirmation.

Either way, I wouldn't try to convince the bank that you reaffirmed the loan. You have nothing to gain.

[bcohen]

Let the car go. It is a far better situation for you if the lender believes--whether correctly or not--that the loan was NOT reaffirmed, and simply sells the car and writes off the balance. You got the use of the car, payment-free, for over 3 years. Surely, that has some value, right? Save up your money, and buy another car when you can.

[SweetGeorgia]

Well, I ended up leaving the car alone and sharing my husband's nearly-200K-mile vehicle for a month. I spent at least 6 hours a day on the road and was pretty anxious the entire time. Ultimately, I qualified for and bought a new base-model Mazda - I put a lot of money down and got a bad (but not horrific) interest rate.

It was a learning experience. I mean, I knew that cars were expensive, but wow. I'm glad at least one company makes a base model that's pretty decent. And I'm glad we moved to another suburb recently, because this one has a SIDEWALK that I can walk for a whole mile to get to a mini-mart, a taxi stand, and a bus stop. Being carless in an utterly car-dependent location is such a helpless feeling.

[Redshirt]

SweetGeorgia - Has anything else come up with USAA? I'm in a semi-similar situation and if I can't wiggle out of the reaffirmation, payment is going to have to stop on our car too. I can't believe they waited 3 years!! Sounds like what they do with the houses.

[SweetGeorgia]

I'm not sure what to tell you. In my case, this is what happened: I didn't make payments during the Chapter 7. We executed a reaffirmation. As soon as the case closed, I wired enough money to bring the car payment account up to date (>$2000). Almost immediately (I found out much later), they wrote off the loan. So, within days of my Chapter 7 closing, I paid up and they wrote off the car. After that point, all the payments I made were reducing USAA's loss, but I was gaining no equity in my car. If I had known that at the time, I would have involved my attorney and/or the court.

But I didn't know that at the time, because they didn't notify me, or the court, or my lawyer. My reaffirmation is still on file. When I spoke to USAA in April, they said "the reaffirmation was denied," which was something only WE could have done. And we did not do that. Reaffirmations in my district are considered "approved by the court" if they are certified by the debtor's attorney, which ours was.

In retrospect, the fact that they would not communicate with us, even to confirm receipt of the payments, should have led me to dig deeper. The car loan statements (even those from before the bankruptcy) vanished from the website. The loan was removed entirely from our credit reports. As time passed after I stopped making payments, I figured that they were waiting for something. We insured our cars with USAA, so they knew where the car was, as well as its condition.

If I could go back, knowing what I now know, I might have been able to figure out what was going on by contacting USAA's bankruptcy department or National Bankruptcy Services, which executed the reaffirmation on USAA's behalf. But I don't know that I WOULD do that, because it could have triggered the repossession sooner, you know?

However, I wouldn't view my case as typical. You have to assume that if you stop paying, the car will get picked up. Take out your personal belongings, don't keep much gas in it, and be prepared to find alternate transportation. The only question is whether you'll still have liability on the loan. Have you received communication or statements from the bank since your bankruptcy was closed? If not, you might want to check with them (BK dept or whoever executed your reaffirmation) to see what's going on. If they are considering your car loan reaffirmed, then maybe you can work something out with them. Good luck to you!

[Redshirt]

Thank you for the tips! I would hope they'd get the car asap, because I just want it all done. Thank you so much for telling your ordeal!!