In 2015 I purchased a car and I was the co-signer. I was to be the main borrower, however, the dealership said my mother had to be so that's how I wound up as the co. Unfortunately, I've had to file chpt 7. The car note has never been late and everything I've seen says not to reaffirm and I've discussed not reaffirming with my mother and she is fine with that as I've continued to make payments through all of this and plan to continue doing so. Ally sent a reaffirmation agreement to my atty. As of yet it has not been signed and Ally sent another letter to them that my atty sent me a copy of stating that the time for the stay is almost up and wanting to know if I planned on reaffirming or not. It also stated that if I didn't, I may be at risk of losing the vehicle. I'm a tad confused at how the vehicle would be lost seeing as how 1. there's still a borrower attached to the loan that's not filing bankruptcy and 2. it's never even been late on payments. Is repossessing the vehicle after BK, even though payments have never been late, something Ally is known for or is this a smoke and mirrors attempt to get the reaffirmation? Also, if they do repo it, then what happens to the main borrower? Do they come after them for the monies even though they took the car back or what? I just don't understand why they're so interested in taking back a vehicle that's upside down by $5K if they still have a borrower and the payments have always been maintained. Does anyone have any experience with Ally similar or heard of other companies doing this? Thanks.
No experience with Ally, however your instincts seem right -- if Ally still has a borrower on the loan that's not filing bankruptcy and the loan remains current, there's no reason the vehicle should be reposessed.
Thank you. I spoke with them today and they stated they would not repo the car just because the reaffirmation agreement wasn't signed as long as payments were kept up, so I guess it's just a scare tactic.
If your Ally Auto Loan was included in BK, a United States Bankruptcy Court Judge must approve an Order on Reaffirmation Agreement, If the value of the vehicle is less than the loan balance most Judges will disapprove, However, in most cases (not all) you have complied with the requirements of 11 U.S.C Sections 362(h) and 521 the debtor may retain the collateral so long as the debtor is not otherwise in default. You and your mother must review your credit reports !!! If you do not reaffirm Ally will report the account CH7bankruptcy, Balance 0 ( main as well as the co-browsers) In my opinon reaffirmation agreements do nothing for borrowers, because if you default on the loan any time after you have such an agreements in place Ally can sue you and /or your mom for a deficientcy balance.
Where is your attorney in all this, you paid them to file and represent you in your proceedings. They answered for you at your creditors meeting that you intend to keep Ally's collatrel. It protects the creditor security interest in the money borrowed as such. Do not take this lightly, a reaffirmation is stating you wish to keep their secured collatrel, and you will sign in agreement to pay X amount of dollars per month for X months in order to do so. It does not matter if you were behind or on time.
Thank you for the responses. I did ask my attorney and was told they could not tell me whether or not to reaffirm the loan. At my 341 meeting, I was never asked what I was or wasn't keeping, though I did state on the paperwork I did intend to reaffirm on the car. I have been using this time to decide if that's what I want to do or not. Technically, because there is another borrower on the loan, there is still a contract in place unless they have the ability to nullify the contract for the other party due to my bankruptcy. That question is what promoted the op.
I.E. There is still another borrower attached to the loan who has not filed bankrupcy. All payments are current and I intend to keep paying on the car. Would they come get the car anyway just because I filed bankruptcy in that scenario? I believe it has already been answered by both the call to Ally and with the help of the other answers.
Thank you all for your help. Only another 29 days til the discharge. Have a great week.