Car Repossessed that was not included in BK Ch 7

[gz3490]

Hello all,

I'm in need of some advice/help, I'll place timelines later down the post, MY car was repossessed last night, I called today and was told that it was because of my BK, I told my credit union that the loan was no included in the BK, they were very short and kept saying they would call me back and tell me the payoff if I want the car back, I then said, "you mean past due?" well you want the car right? I'll have to give you the payoff, we took the car because you filed BK and all your debts were discharged.

Ok, so I filled on 9/5/14 (around same time I stopped receiving bills)

last payment I made was November 2014

debt was discharged 12/16/14

I noticed that the credit union did not sign or return the reaffirmation agreement, my other auto loan with another bank did.

My other loan immediately began sending me bills, the credit union never did.

So my question, will the credit union discharge the debt? and I free of it? this large loan was originally not included because I would not qualify for Ch7.

I called my attorney however she is in court today and I just need an answer or something asap.

Thanks,

[ojefferyo]

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@gz3490 wrote:

Hello all,

I'm in need of some advice/help, I'll place timelines later down the post, MY car was repossessed last night, I called today and was told that it was because of my BK, I told my credit union that the loan was no included in the BK, they were very short and kept saying they would call me back and tell me the payoff if I want the car back, I then said, "you mean past due?" well you want the car right? I'll have to give you the payoff, we took the car because you filed BK and all your debts were discharged.

Ok, so I filled on 9/5/14 (around same time I stopped receiving bills)

last payment I made was November 2014

debt was discharged 12/16/14

I noticed that the credit union did not sign or return the reaffirmation agreement, my other auto loan with another bank did.

My other loan immediately began sending me bills, the credit union never did.

So my question, will the credit union discharge the debt? and I free of it? this large loan was originally not included because I would not qualify for Ch7.

I called my attorney however she is in court today and I just need an answer or something asap.

Thanks,

---

You are positive the car was not included in the bk? I don't see why they would repo the car if it's current and not included unless there was some sort of contingency in the contract of the car itself where it states that if you ever file for bk then they will repo the car.

[gz3490]

So it was there, we filled out a reaffirmation agreement, the credit union did not return it according to PACER.

I wanted to keep the car however lost track of what was owed since I did not receive a bill once we filed.

My last payment to them was in November, as of today the car loan was 84 days late, they received a payment today that they claim has not shown up (bofa.com says otherwise).

A repo order was send according to them because I filed BK (reaffirmation would had given me a heads up) which explains the lack of communication, no calls or letters.

This was a regular loan/contract at a ford dealer, I'll be glad if they keep teh car and discharge the loan, however again I was suppose to keep the car because without that payment according to the courts I would be able to pay my other debts..... sorry if I'm confusing anyone, I'm still a little shocked and yeah about them taking the car last night.

[ojefferyo]

---

@gz3490 wrote:

So it was there, we filled out a reaffirmation agreement, the credit union did not return it according to PACER.

I wanted to keep the car however lost track of what was owed since I did not receive a bill once we filed.

My last payment to them was in November, as of today the car loan was 84 days late, they received a payment today that they claim has not shown up (bofa.com says otherwise).

A repo order was send according to them because I filed BK (reaffirmation would had given me a heads up) which explains the lack of communication, no calls or letters.

This was a regular loan/contract at a ford dealer, I'll be glad if they keep teh car and discharge the loan, however again I was suppose to keep the car because without that payment according to the courts I would be able to pay my other debts..... sorry if I'm confusing anyone, I'm still a little shocked and yeah about them taking the car last night.

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Ok so the paments were 84 days late which is why they issued the repo and not because of the bk. Talk to them to see if you can get current and get the car back if you want it otherwise it would really suck to have made all those payments. 

[StartingOver10]

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@gz3490 wrote:

Hello all,

I'm in need of some advice/help, I'll place timelines later down the post, MY car was repossessed last night, I called today and was told that it was because of my BK, I told my credit union that the loan was no included in the BK, they were very short and kept saying they would call me back and tell me the payoff if I want the car back, I then said, "you mean past due?" well you want the car right? I'll have to give you the payoff, we took the car because you filed BK and all your debts were discharged.

Ok, so I filled on 9/5/14 (around same time I stopped receiving bills)

last payment I made was November 2014

debt was discharged 12/16/14

I noticed that the credit union did not sign or return the reaffirmation agreement, my other auto loan with another bank did.

My other loan immediately began sending me bills, the credit union never did.

So my question, will the credit union discharge the debt? and I free of it? this large loan was originally not included because I would not qualify for Ch7.

I called my attorney however she is in court today and I just need an answer or something asap.

Thanks,

---

There is some miscommunication here between you and the credit union.

1) if you file a Ch 7 and the debt was on the peitition it is included in the Bk. In fact every dischargeable* debt you have at the time, even if you forgot to put it on the petition, is included in the Bk. You have a discharge. So you are not responsible for the repayment of that debt. Speak to your attorney. This loan would have to be in the Bk - no legal way to leave it off. A large loan payment may help you qualify for a Ch 7. Do some research so you understand about Bk (so you don't fall for the traps creditors set up after your discharge)

2) However, since you haven't been making payments, they can pick up the collateral. That doesn't make you responsible to repay the balance at all. The tradeline is supposed to read IIB and zero balance and the credit union can NOT change it to read repo.  In essence it is a surrender of the vehicle after your discharge.

3) It is a darn good thing they didn't sign the reaffirmation agreement. That is why they can't list it as a repo. If they had signed it and it had been properly filed with the court prior to your discharge then you would be reponsible for the debt. So count your lucky stars.

Let them keep the vehicle. The CU doesn't owe you any money back for the time you had it.

Edit:  Not all debts are dischargeable, but all debts are included. Exceptions to dischargeablity are student loans and federal taxes (with some exceptions).

[StartingOver10]

One point of clarification, on your petition is a place for you to describe what you are going to do with your vehicle:

1) surrender

2) reaffirm

3) retain (also known as ride through)

Even if you say you are going to reaffirm, you have to sign the reaffirmtion agreement + the lender has to sign + your attorney has to sign it + the court has to approve it and the signed reaffirmation agreement (new contract) has to be filed with the court prior to your discharge.  If you got all the signatures and it wasn't filed on time, it isn't reaffirmed.

You can surrender any time during or after the Bk. If you don't surrender, the lender will pick it up either during the Bk with the proper motion approved by the court or just wait until after your discharge and then pick it up. Either way, it is a surrender.

If you are going to retain the vehicle you have to make timely payments. They won't send you a statement or bill, it is up to you to pay on time. This is called a 'ride through' usually. If you fail to make payment(s), then your vehicle is picked up - as in a surrender. Not a repo, because the debt has been discharged.

[DaveInAZ]

Please don't take this the wrong way, but there is just alot of misinformation and/or miscommunication here.

"we took the car because you filed BK and all your debts were discharged"

- No, it is not legal for them to repossess your car just because you filed BK, or because your debt was discharged. It IS legal for them to repossess if you are more than 30 days late on the payment after BK discharge. You said you last made a payment in November, so you are more then 30 days late. If you wanted to keep the car all you had to do was to keep sending them same payment you've always made.

"this large loan was originally not included because I would not qualify for Ch7."

- You cannot pick & choose which debt to include in BK, ALL debt is automatically included, wheter you list it or not. The amount of debt dosen't determine if you qualify for CH7, it's the amount of income & assets that determine eligibility. You do have options, such as reaffirming, and since you also said "I noticed that the credit union did not sign or return the reaffirmation agreement", the debt was clearly included in your BK.

Again, all you had to do was keep making the same payments and keep them current. But since you didn't, the CU can pretty much do whatever they want:

1- Sell the car without giving you any options.Since you didn't reaffirm you don't owe them anything. If you had reaffirmed if they sell the car for less than the amount you owe, they could after you with a personal judgement for any & all deficiency.

2- Demand you pay the loan & any fees and interest in full to get your car back

3- If they're really, really nice they can let you pay the past due amount and let you have the car back.

Don't count on getting option #3.

EDIT: Edited to address one other item: you said "My other loan immediately began sending me bills, the credit union never did." - They can't. Once you file Ch7 a creditor cannot make any attempt to collect a debt. Sending you a statement with an amount due is an attempt to collect a debt. Once all parties sign a reaffirmation agreement and the court approves it, they can. I didn't reaffirm my mortgage in my Ch7, and for 2 years they never sent me a statement, I just sent them a check with a brief letter referencing the loan # and stating the enclosed check was for the payment due XX-XX-XXXX. Finally, in 2013 after they merged withanother bank they finally resumed sending me monthly statements.

[gz3490]

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@StartingOver10 wrote:

One point of clarification, on your petition is a place for you to describe what you are going to do with your vehicle:

1) surrender

2) reaffirm

3) retain (also known as ride through)

Even if you say you are going to reaffirm, you have to sign the reaffirmtion agreement + the lender has to sign + your attorney has to sign it + the court has to approve it and the signed reaffirmation agreement (new contract) has to be filed with the court prior to your discharge.  If you got all the signatures and it wasn't filed on time, it isn't reaffirmed.

You can surrender any time during or after the Bk. If you don't surrender, the lender will pick it up either during the Bk with the proper motion approved by the court or just wait until after your discharge and then pick it up. Either way, it is a surrender.

If you are going to retain the vehicle you have to make timely payments. They won't send you a statement or bill, it is up to you to pay on time. This is called a 'ride through' usually. If you fail to make payment(s), then your vehicle is picked up - as in a surrender. Not a repo, because the debt has been discharged.

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Hey StartingOver10,

You got pretty much everything right on the dot. I got more information from my attorney so here it goes.

Yes the car was in the BK ch7 schedule, I cant remember specifics but due to our joint income we would have had to apply for Ch13 which we did not want to, only way around this was to reaffirm our two cars which we signed and forwarded to the lenders.

other lender quickly signed and returned, the CU failed to return, I lost track of the payments and also with christmas I stopped paying.

Just this week I sent two payments and as one was about to be delivered they repo (or so I thought) the car. the next morning after we were heartbroken and mad because we had NO notice, No calls, No attempt to tell us to pay. I called the CU and they seemed surprised I called, said the car was BK and debt Discharged.

After talking to our attorney it worked in our favor, we got rid of a loan because they did not fill the reaffirmation and that is the reason I had no notices given.

So yes it was not a Repo, now I know it was a surrender. 

I'm able to follow the car online and via app and can see that it is at a Dealer Only Auction just two days after it was surrendered.

[ezdriver]

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@DaveInAZ wrote:

Please don't take this the wrong way, but there is just alot of misinformation and/or miscommunication here.

"we took the car because you filed BK and all your debts were discharged"

- No, it is not legal for them to repossess your car just because you filed BK, or because your debt was discharged. It IS legal for them to repossess if you are more than 30 days late on the payment after BK discharge. You said you last made a payment in November, so you are more then 30 days late. If you wanted to keep the car all you had to do was to keep sending them same payment you've always made.

"this large loan was originally not included because I would not qualify for Ch7."

- You cannot pick & choose which debt to include in BK, ALL debt is automatically included, wheter you list it or not. The amount of debt dosen't determine if you qualify for CH7, it's the amount of income & assets that determine eligibility. You do have options, such as reaffirming, and since you also said "I noticed that the credit union did not sign or return the reaffirmation agreement", the debt was clearly included in your BK.

Again, all you had to do was keep making the same payments and keep them current. But since you didn't, the CU can pretty much do whatever they want:

1- Sell the car without giving you any options.Since you didn't reaffirm you don't owe them anything. If you had reaffirmed if they sell the car for less than the amount you owe, they could after you with a personal judgement for any & all deficiency.

2- Demand you pay the loan & any fees and interest in full to get your car back

3- If they're really, really nice they can let you pay the past due amount and let you have the car back.

Don't count on getting option #3.

EDIT: Edited to address one other item: you said "My other loan immediately began sending me bills, the credit union never did." - They can't. Once you file Ch7 a creditor cannot make any attempt to collect a debt. Sending you a statement with an amount due is an attempt to collect a debt. Once all parties sign a reaffirmation agreement and the court approves it, they can. I didn't reaffirm my mortgage in my Ch7, and for 2 years they never sent me a statement, I just sent them a check with a brief letter referencing the loan # and stating the enclosed check was for the payment due XX-XX-XXXX. Finally, in 2013 after they merged withanother bank they finally resumed sending me monthly statements.

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That is not correct. SInce there was no reaffirmation agreement in place, the lender has the lagal right to take possession of the collateral. Also, credit unions almost never sign reaffirmation agreements and they are certainly not bound by any law to sign reaffirmation agreements.

[despritfreya]

"After talking to our attorney it worked in our favor, we got rid of a loan because they did not fill (sic.) the reaffirmation. . ."

　

The information from above posters (some correct and some not correct) does not address the real issue that you must discuss with your attny because you, in fact, signed a reaffirmation agreement.

The issue is whether or not you timely rescind that agreement. Remember, you have no information as to whether or not someone at the CU signed the document after you returned it and just simply forgot to file it with the Court or lost it.

The law and its potential ramifications are as follows:

Pursuant to 11 USC 524(c), an otherwise dischargeable debt IS NOT subject to the discharge if:

1. The parties enter into a reaffirmation agreement before the entry of the discharge.

This means that both parties have SIGNED the document before the discharge. We know you did. We do not know if the CU did.

2. The agreement contains the proper disclosures.

You can bet it does.

3. The agreement is filed with the Court.

As of right now, it has not been filed. There is nothing in the bk code that states when it is to be filed. It only states that it must be filed. This is the prong you have a problem with since you have no control over what the CU does or does not do.

AND

4. The agreement has not been rescinded either before the entry of the discharge or within 60 days of the date the agreement is filed with the Court, whichever is LATER.

While it would be bad faith for the CU to file the agreement with the Court now since it has possession of the vehicle, why on this planet would you take the chance? If you were my client, I would be sending a Notice of Recision to the CU and file the same with the Court so that this issue is completely put to bed.

Please go back to your attny and seriously discuss this matter as you are looking sending a simple one paragraph letter to the CU and filing it with the Court - a small price to pay for a sound sleep.

Des.