2nd Q - Can I Reaffirm or Redeem Auto While Unemployed?

[BKinGA]

I am currently unemployed and filed for Chapter 7 on 12/4 and will have the meeting of creditors on 1/13.

I want to keep my 1999 car (approximately $2500 balance and value $2700) and my intention to keep it was indicated when my attorney filed the papers.

But from reading the posts here they say that the judge determines if I can reaffirm it.

Will the judge let me keep it even though my only income is a $200 mo pension and $1320/mo in unemployment? (My unemployment should run through mid June). Or if not, which company would finance the redemption considering that I am still unemployed?

Thanks for your help.

[justbroke]

In the end, it is up to your lawyer to validate that it's not a hardship (or won't be a hardship) and then a judge to sign off on that determination. (Some lawyers won't even do re-affirmations.)

So, I can't tell what's in the Judge's or your Lawyer's mind. Since you have a lawyer, it's best to ask if s/he'd sign off on a reaffirmation agreement.

[BKinGA]

In the end, it is up to your lawyer to validate that it's not a hardship (or won't be a hardship) and then a judge to sign off on that determination. (Some lawyers won't even do re-affirmations.)

So, I can't tell what's in the Judge's or your Lawyer's mind. Since you have a lawyer, it's best to ask if s/he'd sign off on a reaffirmation agreement.

My attorney said that he would sign off on a reaffirmation agreement. But does that mean that the judge would too? Or is it still up to their discretion? And if the judge does not, does anyone know which companies would finance a redemption considering that I am still unemployed?

Thanks

[justbroke]

My attorney said that he would sign off on a reaffirmation agreement. But does that mean that the judge would too? Or is it still up to their discretion? And if the judge does not, does anyone know which companies would finance a redemption considering that I am still unemployed?

In most Districts, if the attorney signs off, the judge will. There is some sort of certification by the Attorney that it doesn't represent a hardship. Some judges just rubber stamp it, others will actually look at it.

[keepmine]

And, there is case law that says the petitioner has done all they are required to do by offering to reaffirm. If the reaffirmation is denied, they still keep the property.

[BKinGA]

And, there is case law that says the petitioner has done all they are required to do by offering to reaffirm. If the reaffirmation is denied, they still keep the property.

Wow, really? If so thats great, do you have a link to that citation or a reference that I can search?

Many thanks

[AngelinaCat]

What is your monthly payment? If you can manage that on your unemployment income you might be okay. I can't see the judge signing off on that w/o assurance that the rest of your income will let you eat and have a place to sleep.

You may be able to do a 'ride-through', that is keep making the monthly payments--and keep them current--w/o reaffirming. That would be to your advantage, in that if for some reason you can't make the payments after 4-5 months, and your vehicle is reposed, then you will NOT be responsible for any deficiency.

Some districts will not allow ride-throughs, though. Good luck to you.

[TEW]

What is your monthly payment? If you can manage that on your unemployment income you might be okay. I can't see the judge signing off on that w/o assurance that the rest of your income will let you eat and have a place to sleep.

You may be able to do a 'ride-through', that is keep making the monthly payments--and keep them current--w/o reaffirming. That would be to your advantage, in that if for some reason you can't make the payments after 4-5 months, and your vehicle is reposed, then you will NOT be responsible for any deficiency.

Some districts will not allow ride-throughs, though. Good luck to you.

Very good point Mrs. C I don't understand why you would reaffirm this loan when income is so shaky. just ride it through.

[BKinGA]

What is your monthly payment? If you can manage that on your unemployment income you might be okay. I can't see the judge signing off on that w/o assurance that the rest of your income will let you eat and have a place to sleep.

You may be able to do a 'ride-through', that is keep making the monthly payments--and keep them current--w/o reaffirming. That would be to your advantage, in that if for some reason you can't make the payments after 4-5 months, and your vehicle is reposed, then you will NOT be responsible for any deficiency.

Some districts will not allow ride-throughs, though. Good luck to you.

My monthly payment is $213 and right now I receive 1320/mo for unemployment and 205/mo pension. I need a car to be able to look for work and the car runs really good. I am in the Atlanta, GA area. Im concerned that if I dont try to reaffirm, that the company will repo it. How can I find out if the ride-through is allowed in my district?

Or if neither a reaffirmation or ride-through ends up being available to me, what are my chances for getting a 722 redemption considering my situation? Somehow, someway I have to have a car.

Thanks again for your help.

[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

[AngelinaCatHub]

My monthly payment is $213 and right now I receive 1320/mo for unemployment and 205/mo pension. I need a car to be able to look for work and the car runs really good. I am in the Atlanta, GA area. Im concerned that if I dont try to reaffirm, that the company will repo it. How can I find out if the ride-through is allowed in my district?

Or if neither a reaffirmation or ride-through ends up being available to me, what are my chances for getting a 722 redemption considering my situation? Somehow, someway I have to have a car.

Thanks again for your help.

[BKinGA]

I looked on Lexis Nexis at the Georgia Bankruptcy Exemption Code and it says per 44-13-100(a)(3)

"(3) The debtor's interest, not to exceed the total of $3,500.00 in value, in all motor vehicles;"

Would this exemption work? (My car is valued at around 2700 and the balance is now approximately 2500.)

Also .............

http://www.georgiabankruptcyblog.com...agreement.html

I wll show this to my attorney.

It looks like between the state exemption and the case law, I could keep the car as long as I keep the payments and insurance current (which I will).

Thanks so much for this information!

[banca rotta]

I am currently unemployed and filed for Chapter 7 on 12/4 and will have the meeting of creditors on 1/13.

I want to keep my 1999 car (approximately $2500 balance and value $2700) and my intention to keep it was indicated when my attorney filed the papers.

But from reading the posts here they say that the judge determines if I can reaffirm it.

Will the judge let me keep it even though my only income is a $200 mo pension and $1320/mo in unemployment? (My unemployment should run through mid June). Or if not, which company would finance the redemption considering that I am still unemployed?

Thanks for your help.

While I hate to tell someone to borrow from a 401k or other retirement plan, do you have at least 2000 you can get anywhere?

I would find out if you can make some cash offer for below FMV so you can just get the car and not have to reaffirm.

Of course this may cause other problems such as taking out this cash while in bk and your allowed exemptions. You certainly need the car but it must be difficult to reaffirm without any income.

[keepmine]

Just found this 4th circuit ruling.


Limited "Ride Through" Option Remains Post-BAPCPA
A federal district court in North Carolina has held that a limited "ride through" option remained in effect even after enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to permit pro se Chapter 7 debtors who had done everything they could to reaffirm their $20,000-plus debt on a motor vehicle by filing a timely statement of intent and actually entering into a reaffirmation agreement, but whose reaffirmation agreement had not been approved by the bankruptcy court, to remain in possession of the motor vehicle while continuing to make their regular monthly payments to the motor vehicle lender. The automatic stay remained in effect with respect to the motor vehicle, the vehicle remained part of the bankruptcy estate, and the debtors were not in default on the car loan, despite the presence of an "ipso facto" clause in their loan agreement with the motor vehicle lender. The court rejected the lender's arguments that BAPCPA's plain meaning led to absurd results and that the bankruptcy court's analysis contravened clearly expressed congressional intent in BAPCPA's legislative history. Coastal Federal Credit Union v. Hardiman, 2008 WL 4899529 (E.D.N.C.).

[BKinGA]

Just found this 4th circuit ruling.

Limited "Ride Through" Option Remains Post-BAPCPA
A federal district court in North Carolina has held that a limited "ride through" option remained in effect even after enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to permit pro se Chapter 7 debtors who had done everything they could to reaffirm their $20,000-plus debt on a motor vehicle by filing a timely statement of intent and actually entering into a reaffirmation agreement, but whose reaffirmation agreement had not been approved by the bankruptcy court, to remain in possession of the motor vehicle while continuing to make their regular monthly payments to the motor vehicle lender. The automatic stay remained in effect with respect to the motor vehicle, the vehicle remained part of the bankruptcy estate, and the debtors were not in default on the car loan, despite the presence of an "ipso facto" clause in their loan agreement with the motor vehicle lender. The court rejected the lender's arguments that BAPCPA's plain meaning led to absurd results and that the bankruptcy court's analysis contravened clearly expressed congressional intent in BAPCPA's legislative history. Coastal Federal Credit Union v. Hardiman, 2008 WL 4899529 (E.D.N.C.).

Thanks for this additional information! I will give this to the attorney as well.

Also...

While I hate to tell someone to borrow from a 401k or other retirement plan, do you have at least 2000 you can get anywhere?

I would find out if you can make some cash offer for below FMV so you can just get the car and not have to reaffirm.

Of course this may cause other problems such as taking out this cash while in bk and your allowed exemptions. You certainly need the car but it must be difficult to reaffirm without any income.

I would love to pay off the car loan, but unfortunately there are no retirement funds, and I dont know anyone that I could get the cash from. I am still unemployed and will need the car to find (and keep)a job.

I do have a question about employment as well and will ask it in a seperate post.

Thanks again to all!