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Chapter 7 - American Infosource + Capital One. To reaffirm or not?

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Anonymous
Not applicable

Chapter 7 - American Infosource + Capital One. To reaffirm or not?

I just had my 341 meeting and need to hear some advice. The company that Capital One Auto Finance uses to assist in BK, American Infosource, assigned a high value - $17k - to my vehicle on the reaffirmation agreement. My attorney shared that KBB or similar trade values should be used, but AIS will not sign a reaff without their numbers on it. I have another vehicle that isn't working and I only owe a small amount on but the trustee did express interest in that car.

 

The trustee didn't bat an eyelash about that car because my exemptions on the petition cover the value that KBB said. I have a small amount of equity. 

 

My attorney basically said that my options are to:

1) reaffirm with the value that AIS placed and risk the trustee looking at the vehicle equity

2) don't reaffirm and keep paying with the risk that Capital One can repo at any time

 

This is currently our only working car, so there's significant concern. Attorney said they can't guarantee it but it's unlikely that Capital One would want to take the car so long as we keep paying and we have never been late on this car or missed payments.

 

4 REPLIES 4
MileHigh96
Frequent Contributor

Re: Chapter 7 - American Infosource + Capital One. To reaffirm or not?

If there is an issue with the valuation being too high, then I would just keep paying without doing the reaffirmation. The downside is that you won't have the auto loan tradeline on your credit report, but on the upside, you won't be saddled under a valuation you don't think is fair.

YMMV but my attorney laid out the options for me (reaffirm or don't) and she told me that it's extremely, extremely rare that a vehicle gets repo'd so long as you are making all your payments on time. So if you aren't comfortable with doing a reaffirmation with the valuation assigned, then I would probably go the route of just keep paying without reaffirming the loan and roll the dice, but of course you can only do what you feel the most comfortable with.

Also as an aside, if something were drastic to happen and they did a repo on it, post-BK, an auto loan is probably one of the easiest things to get and although you wouldn't get favorable interest rates or terms, an auto loan could always be refinanced a year or so later to get better terms on the loan. 4+ months past discharge of my BK, I am STILL getting letters in the mail from car dealers.
BK7 discharged - 06JUL2021
Loans:

Revolving Accounts (in the order they were opened):

Closed accounts:
Message 2 of 5
rosco75
Regular Contributor

Re: Chapter 7 - American Infosource + Capital One. To reaffirm or not?

I agree with MileHigh - Car loans are typically the easiest thing to get post BK. About a month after my BK I noticed my score going up. It was going up almost 30 points a month. 4 months after my discharge I went and traded my truck that I reaffirmed in for a new car and had zero issues. I actually got way better rates than I would have thought possible. If it were me, I would roll the dice and not reafirm. Then jsut wait for your score to increase and go trade it in. 


Message 3 of 5
Anonymous
Not applicable

Re: Chapter 7 - American Infosource + Capital One. To reaffirm or not?

Appreciate your feedback. My attorney shared the same - all but guaranteed that it's unlikely so long as I keep paying. Curious, did you work with Capital One as well? And it sounds like maybe you were on the fence about reaffirmation too? 

Message 4 of 5
MileHigh96
Frequent Contributor

Re: Chapter 7 - American Infosource + Capital One. To reaffirm or not?


@Anonymous wrote:

Appreciate your feedback. My attorney shared the same - all but guaranteed that it's unlikely so long as I keep paying. Curious, did you work with Capital One as well? And it sounds like maybe you were on the fence about reaffirmation too? 


No, my car loan  was through the CU in my signature.  I wasn't too mujch on the fence about reaffirming only because I wanted the tradeline on my CR, but I was definitely all for reaffirming when the CU sent my attorney the documents for reaffirmation with a lowered interest rate.  She still made me sign documentation that I was reaffirming the loan against her advice, but since I had never been late with the loan and I don't plan on getting rid of my truck any time soon PLUS the fact the CU lowered the interest rate, I was definitely onboard with reaffirming.

BK7 discharged - 06JUL2021
Loans:

Revolving Accounts (in the order they were opened):

Closed accounts:
Message 5 of 5
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