need to decide if I want to "re-affirm" my car loan

[pizza1]

Hi all, Im new to the forums, filed BK 5/2013, scheduled to DC 08/2013. My car loan is through Santander (i know suck ass company), BUT, ive had the car loan for a year now with NO late payments, (it was a new car loan and I put 10k down). They havent asked me to reaffirm the debt, and I called them to ask if I could. DID i make the right decision or not? I  have 10k left on the loan, and Ive never been late on the note. Should I not reaffirm the note, continue to make my monthly payments on time like I always have, and pray they dont come and repossess the car after discharge??? Ive heard they can do that, even if you have never been late on payments, and the account is in good standing!! Need a bit of advice asap please.   Thank you!!

[chasmith]

Do you have an attorney?  You need to ask their advice.  To reaffirm a loan your lwayer has to make a filing and the judge has to approve the reaffirmation.  My lawyer was opposed on principal to reaffirmations because you are giving the lender something for nothing.  If you have a lawyer, your alwyer must deal with Santander and if you decide to reaffirm that must be completed before your case is closed.  With discharge due next month this is time critical.

Your ability to keep the car and make payments without reaffirming depends on your contract with the lender, and the rules of your state and BK Court.  Some lenders (Ford Credit, Toota Credit etc.) make simply filing BK an "event of default" and they can repossess the car as soon as the automatic stay is lifted.  But that is not allowed everywhere.

If you don't reaffirm, your loan probably won't be reported to CRAs, but there's no guarantee it will be if you do reaffirm.

I understand that you put a large downpayment on the car, but I don't know how much time is left and how hard it will be to keep making the payments.  My best advice is, if your attorney tells you the lender can't repossess as long as you keep the payments current (a "drive through") there's no reason to reaffirm.  Since you don't say whether the car has equity because of your downpayment, or how long the remaining 10K has to be paid off, I can't offer advice whether to reaffirm if you would have to keep it.

[pizza1]

Chasmith----

Yes, I have an attny, I filed chapter 7 bk in may, and will be discharged mid next month. He advised not to reaffirm, cause he always tells his clients to not reaffirm anything. Im scared that if I dont reaffirm, that upon discharge they will come and repossess my car. Ive never been late on payments, always made the exact payment on time, for a whole year now, and only owe 10k. Its a 2012, adn I put 10k down payment on it. I dont want to live in fear after the discharge, and it will be sometime before I can get someone else to refinace it adn pay off Santander. My attny says they have dealt with this company before and have never had any of their clients who were current and never late, to have them repossess, but Im scared, LOL. Im just confused as to wat to do. 

[pizza1]

oh, forgot to mention my payment is only $275 a month, and have 3yrs left

[chasmith]

Your lawyer is giving the same advice that mine did.  I think you need to ask your attorney whether the law of your state and cases in your BK court allow lenders to repossess on a current loan.  Not "what are the odds, what have you seen" but "what is the law?".

[Comet21]

Most lawyers advise their clients to never reaffirm but every situation is different. We had less than a year to pay off our vehicle so we reaffirmed. We also had to stay on the finance company to start reporting again. I have not checked in a while but even when it was paid off, it was still showing we had a balance. Oh we'll, I have the title

[SoulMaster]

Here is the quickie formula:

IF VALUE > OWE THEN CONSIDER APPLYING TO REAFFIRM

ELSE NEVER REAFFIRM

This applies to houses, cars, boats, trains, taco bells, etc...  Basically, you're keeping the equity by reaffriming the debt.  If you're not going to keep an equitable asset (house, car, taco bell, etc) in a BK, then sell it before you ever file and see if the BK can be avoided entirely.

There are extremely rare cases where this doesn't apply, but most people (including whoever's reading this) aren't going to run across them... so just assume the rule applies to you.

I also use "applying to reaffirm" here on purpose.  Choosing to reaffirm something isn't up to the petitioner... it's up to the court and original creditor. You're simply allowed to ask nicely.  Your BK will cost you more, too.

Finally, I use "consider" applying because you still don't have to.  If your car/house will never be repoed, and you hold title, why bother?  It's just extra court paperwork.  Simple = better.

-SM

[SoulMaster]

---

@pizza1 wrote:

oh, forgot to mention my payment is only $275 a month, and have 3yrs left

---

After reading my post above, this payment doesn't matter....  Does the car have actual, real, equity.  Meaning, can you sell it tomorrow for more than you owe?  I don't mean can you list it for what you owe and hope someone buys it, I mean take what you think it's worth, subtract $2000-$5000 to make it something that will sell instantaneously, for cash, and then subtract what you owe.

Cheers,

-SM

[lovelylisa84]

Do not reaffirm. If you wish to keep the vehicle then continue making payments! You can build your credit elsewhere. I too had Santander but stopped paying since I was so upside down and had such a high rate. They repoed right at 60 days late out of ch 7. But I did not reaffirm so I am not responsible for any balance nor can they say the car was repo. I ended up buying a new car with cap 1 at 9.9% which was a whole lot better than the 22% that I had with Santander...thats why I stopped paying the car...to get rid of it.  BTW they just repoed it last week...it didnt matter because I had my new car. I can almost guarantee they will not repo less than 30 days late...it is a waste of $ for them but I was at 60 days late so that is different. Most lenders will repo at 60 or 90+

[pizza1]

@ lovelylisa.....

I'm not upside down on my car, and I've never been late on a payment. This was a new car loan a year ago. I've still been making on time payments e win during my bk, which is to be discharged in 2 weeks. If I don't reaffirm, can I just keep the car and continue to be on time with my payments ? They won't repossess if I'm current and the account is in good standing will they? Repeat....I'm current, always have been and never ever late Thank you!!