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Valued Member
lil_bo_peep
Posts: 32
Registered: ‎07-25-2008
0

Re: Reaffirmation of car loan

So I went to my creditors meeting yesterday and my lawyer says everything went smoothly and the only thing we are waiting for is the Reaffirmation of my car loan and when/if they get it back from financial institution all I have to do is sign some additional paperwork. 

 

My ?? Is this, have any of you ran into a problem with your financial institution reaffirming your loan after a BK7???

 

Just curious to see how painful this is going be.  Thank you for any help you can provide! :smileyindifferent:

Just a little reminder.....sometimes these boards get a little confusing but we are all here to help each other not make things more difficult, you can only Do what's right for YOU, not what everyone else thinks is right for you! Love you guys!!! :smileywink:
Regular Contributor
Comet21
Posts: 204
Registered: ‎08-29-2007
0

Re: Reaffirmation of car loan

We have not had any problems. We had our creditors meeting in February and we are awaiting our discharge. I have spoken with our Auto and Mortgage(we reaffirmed both) and both sated that they would start reporting after discharge since we reaffirmed. They said they would not do so until then, because we have the right to pull the reaffirmation before discharge. Make sure you continue to pay because they are going to discontinue all auto payments. Every creditor will do this(Student Loans, Credit Cards, Mortgage, etc.)  


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


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Valued Member
lil_bo_peep
Posts: 32
Registered: ‎07-25-2008
0

Re: Reaffirmation of car loan

Thank you for your response Comet<> this is what I intend to do! 

 

 I just hope everything goes according to plan.  Santander can be pretty hard to deal with.

 

Quick question, did you sign your reaffirmation agreement before your creditors meeting or after?

 

Just a little reminder.....sometimes these boards get a little confusing but we are all here to help each other not make things more difficult, you can only Do what's right for YOU, not what everyone else thinks is right for you! Love you guys!!! :smileywink:
Regular Contributor
Comet21
Posts: 204
Registered: ‎08-29-2007
0

Re: Reaffirmation of car loan

We signed after our creditors meeting.

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


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Frequent Contributor
JenniferinFL
Posts: 332
Registered: ‎03-16-2012
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Re: Reaffirmation of car loan

I reaffirmed my car loan as it was only $1800 that I owed..

 

It seemed like it went really smoothly, I'd never been late on the payment.

 

But, as soon as my bankruptcy discharged they tacked on $1000 in legal fees that they hadn't disclosed and when I filed complaints they told me I couldn't do anything about it because I reaffrimed the debt.

 

My car loan was with SST.

Before reaffirming an auto loan, get in writing that there won't be additional fees added later for reaffirming.


Current Cards: Cap 1 Journey $3000, Cap 1 Playstation $2250, WFNNB Store Cards $2450 combined, Target $700, CareCredit $1700, Barclay Rewards Plat. Mastercard $1800, Old Navy $300

Starting Score: 615 EQ (03-15-2012) 600 TU (03-21-2012 Barclays app) ) Ch.7 discharged 5/2009
Current Score: 663 EQ (06-10-12) 684 TU (08-15-2014 myfico)
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Valued Member
lil_bo_peep
Posts: 32
Registered: ‎07-25-2008
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Re: Reaffirmation of car loan


JenniferinFL wrote:

I reaffirmed my car loan as it was only $1800 that I owed..

 

It seemed like it went really smoothly, I'd never been late on the payment.

 

But, as soon as my bankruptcy discharged they tacked on $1000 in legal fees that they hadn't disclosed and when I filed complaints they told me I couldn't do anything about it because I reaffrimed the debt.

 

My car loan was with SST.

Before reaffirming an auto loan, get in writing that there won't be additional fees added later for reaffirming.



Thanks Jennifer!!  I have sent my lawyer an email regarding the fees and I'm waiting on a reply.  I would have never thought about that if it were not for your post so thanks again!:smileysurprised:

 

Lil_bo 

Just a little reminder.....sometimes these boards get a little confusing but we are all here to help each other not make things more difficult, you can only Do what's right for YOU, not what everyone else thinks is right for you! Love you guys!!! :smileywink:
Established Contributor
SoulMaster
Posts: 981
Registered: ‎11-08-2011
0

Re: Reaffirmation of car loan

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.  

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.
Valued Member
lil_bo_peep
Posts: 32
Registered: ‎07-25-2008
0

Re: Reaffirmation of car loan

Okay, so I don't need to reaffirm to keep my vehicle.  I cannot believe my attorney did not tell me that.  I was under the impression that if i didn't reaffirm then I had to give them my car back.  I have just sent him another email regarding this new information.  Thank you SoulMaster!

Just a little reminder.....sometimes these boards get a little confusing but we are all here to help each other not make things more difficult, you can only Do what's right for YOU, not what everyone else thinks is right for you! Love you guys!!! :smileywink:
Regular Contributor
Comet21
Posts: 204
Registered: ‎08-29-2007
0

Re: Reaffirmation of car loan

My attorney did not suggest we reaffirm but he was not against it also. From our intial consultation he expliained that our situation was very unique from most of his cases. Our BK was due to a Business Loan that we had a personal guarentee. We had also used a few credit cards for the business to fill-n for the shortfall of the loan. We reaffirmed with our auto because we will be finished paying on it THIS YEAR. The home was difficult because like you said, you don't know what can happen tomorrow. But we decided to reaffirm becuase our home was never the source of our financial difficulties and we could not get a clear answer on the equity.

 

Soul- Do you think our scores will be impacted greatly once our mortage and auto payment history is reporting correctly? Obviously right now they are showing as IIB. It has been a month and a half since our creditors meeting. I believe we have 60 days to pull back our reaffirmation. We have never been late so that is 4+ years of on-time payments. Or does it even matter, creditors will see a BK and judge us on that no matter what our scores are? 


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


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Established Contributor
SoulMaster
Posts: 981
Registered: ‎11-08-2011
0

Re: Reaffirmation of car loan

Here is the only thing that could help your credit score:  Mix of Credit (Types of Credit Used) counts for 10% of your score.  But when you have a fresh BK, your score really doesn't matter at all.  It's nice to think that it does, but to answer your question: Lenders will see the BK and they will either lend to you or they won't.

 

A perfect example of this is Amex/Chase.  It possible to have a 700+ score after BK, but neither of them are going to give you their plastic.  In addition, you can't get a (normal) mortgage for 2 years after the BK (3 years from date of title transfer if you include a house in the BK).

 

So, will reaffirming the car loan help your score? Yes,  IF the lender reports it as not IIB, and current on all payments you score will go up a tiny fraction.  Note, they are under no obligation to do either.  But, it's the BK that really matters.

 

Obviously, this doesn't mean that a BK filer shouldn't act responsibly, especially since any lates AFTER a BK hurt more than you can imagine.  But trying to build or rebuild a score after a BK doesn't mean we should be making incorrect decisions.  Also, note that it was the bank lobby who requested the reaffirmation language in the BK code... it's there to help them, not you.  A good attorney won't even let you reaffirm, he/she will teach you that you don't really need to/shouldn't and why.   Unfortunatley most BK firms just want to cookie cutter cutter people in to thier mill.

 

The easier way to mix credit types is to get an credit-builder or secured loan against a CD.  It's also safer than reaffirming.

 

A final note is that it doesn't matter why you filed (business loan, medical debt, CCs, other) to any of the banks.  The fact is, you did file, and there is no explanation that's better than any other. (Sucks, but that's the truth).  I'd work (and I'm working) on getting your (my) scores as high as they can be so that when the BK drops, you get a nice boost.  One thing to do is make certain that all accounts that you included in the BK actually are reported as such.

 

Good luck!

 

-SM

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of 3/15/14 All 700+. Last CR pull from a lender(housing) was mid-score 729.
Goal Score: 700+ - reached.

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