cancel
Showing results for 
Search instead for 
Did you mean: 

Re: Reaffirmation of car loan

Regular Contributor

Re: Reaffirmation of car loan

BMW has started reporting my auto loan after reaffirming the debt. I had to send them my discharge paperwork. I spoke with a representative over thephone that said it would happen automatically but it could take up to 60 days from the Sunday after my next payment. I did not want to wait that long especially since they treat the account as a normal debt. They auto draft and send my invoices with a due date. I sent a secure email through the MyBMW page and they replied quickly telling me to attach my discharge paperwork. When I went to do an online dispute this morning with EQ my auto loan was reporting!!! I am not buying a score at this time until my credit card statements are cut with correct utilization.


Starting Score: TU 477 EQ 533 BK 1/27/2012
Current Score: EX 702 TU 681 EQ 652 1/10/2014
Goal Score: 700


Take the FICO Fitness Challenge
Message 21 of 25
Regular Contributor

Re: Reaffirmation of car loan

Okay my Car Loan is back to reporting on my reports and it states Reaffiemation of Debt and it made my score INCREASE by a whopping 8 points. Not the reason I reaffirmed but I thought it would have increased by more. Only 6 more payments and it is finished anyways.


Starting Score: TU 477 EQ 533 BK 1/27/2012
Current Score: EX 702 TU 681 EQ 652 1/10/2014
Goal Score: 700


Take the FICO Fitness Challenge
Message 22 of 25
Highlighted
Valued Member

Re: Reaffirmation of car loan


SoulMaster wrote:

Ok, to put this issue to bed I called one of the trustees I know and specifically asked him about car reaffirmation/repo.  Here is a quick summary of what he said:

 

First and foremost, not all reaffirmation applications will be approved, it's largely up to the trustee in the case, and if he/she feels it's a bad idea they won't approve it.  Secondly, a trustee (and/or the court) may give a lienholder an EXPLICIT right to reposess a vehicle whose loan is current.  This time, its up to the trustee/court and they may do it if there are multiple vehicles, or the believe there was extravagent or intentional spending that doesn't warrant a dismissal.  (i.e. "I"m going to ignore my credit card payments and go buy this car I can't afford). He added that the petitioner (person filing the BK) can also get EXPLICIT instructions to a creditor that they are NOT to reposess a car (regardless of reaffirmation) unless the debtor misses a payment.



So what happens when the discharge papers from the BK Court specifically state that although the reaffirmation agreement appears to be properly completed, the Trustee does not approve it?  Is it still valid?  Does the debtor have to return the vehicle? 

I have a friend who is in just such a situation.  The discharge went through, but stated that the reaffirmation was not approved because he felt it would continue to place an undue hardship on the debtor.  However, her attorney is telling her that doesn't matter, that the reaffirmation agreement is in place between her and the lender, and to keep paying for the vehicle.  I'm trying to explain to her that she needs to quit paying and turn the vehicle in and allow the debt to be discharged, but she just seems attached to the otherwise ordinary truck.  She doesn't even have any equity in it... possibly a couple grand upside down still.

Message 23 of 25
New Visitor

Re: Reaffirmation of car loan

I disagree about not reaffirming your mortgage!   If your mortgage is not reaffirmed you.may not be able to refinance in the future. 


SoulMaster wrote:

I'm copying a section in from another reply I made moments ago:

 

If you're filing bankruptcy, you need to go scorched earth.  Any attorney who recommends reaffirmation (which means re-signing for certain debt after the bankruptcy) isn't worth thier degree.  No one should EVER reaffirm ANYTHING.  The whole point of a bankruptcy is to get yourself a fresh start.  How can you do that if you're going to carry $15,000 of debt on a car that's only worth $7K?  Moreover, despite popular belief, you do not have to reaffirm houses/cars to keep them.  As long as you continue to make your payments on time, the lender cannot  foreclose/reposess your property.  When you're filing BK, things are bad, if you don't reaffirm you're not liable for the debt if things go from bad-to-worse in the future.  As a final note on this, some people will recommend reaffirming debt on houses that have equity in them.  This is a mistake.  You don't need to be liable for the debt to retain your equity position, as long as you keep paying the bill.

 

Seriously, do NOT reaffirm.  You can't see the future and you don't know what will happen tomorrow, and you can keep the car whether or not you reaffirm.  If you can see the future, you can see tonight's lottery #'s and don't need a BK anyway.  Regarless of equity, do not reaffirm, in 99.9% of all cases, it's a huge mistake brought on by mis-information (including some bad info in these forums).

 

-SM

 

Please note, that my $15K/7K example was from my original post.  


 

Message 24 of 25
Moderator

Re: Reaffirmation of car loan


Nanananabanana wrote:

I disagree about not reaffirming your mortgage!   If your mortgage is not reaffirmed you.may not be able to refinance in the future. 


SoulMaster wrote:

I'm copying a section in from another reply I made moments ago:

 

If you're filing bankruptcy, you need to go scorched earth.  Any attorney who recommends reaffirmation (which means re-signing for certain debt after the bankruptcy) isn't worth thier degree.  No one should EVER reaffirm ANYTHING.  The whole point of a bankruptcy is to get yourself a fresh start.  How can you do that if you're going to carry $15,000 of debt on a car that's only worth $7K?  Moreover, despite popular belief, you do not have to reaffirm houses/cars to keep them.  As long as you continue to make your payments on time, the lender cannot  foreclose/reposess your property.  When you're filing BK, things are bad, if you don't reaffirm you're not liable for the debt if things go from bad-to-worse in the future.  As a final note on this, some people will recommend reaffirming debt on houses that have equity in them.  This is a mistake.  You don't need to be liable for the debt to retain your equity position, as long as you keep paying the bill.

 

Seriously, do NOT reaffirm.  You can't see the future and you don't know what will happen tomorrow, and you can keep the car whether or not you reaffirm.  If you can see the future, you can see tonight's lottery #'s and don't need a BK anyway.  Regarless of equity, do not reaffirm, in 99.9% of all cases, it's a huge mistake brought on by mis-information (including some bad info in these forums).

 

-SM

 

Please note, that my $15K/7K example was from my original post.  


 


The sentence in red is incorrect. The discharged mortgage, whether reaffirmed or not, has nothing to do with the debtors ability to refinance at some later date. The ability to refinance is based on the borrowers qualifications at the time of refinance. The amount of the mortgage and the value of the collateral are also part of the refi process.

Message 25 of 25