Debt reaffirmation

Anonymous · ‎08-29-2016

Hi guys So my head got spinning tonight over the thought of Debt Reaffirmation...namely my Ally Financial Auto Loans....After my 341 meeting my lawyer assured me that everything was smooth sailing after that...and it was...except that we never received reaffirmation papers from Ally...I asked my lawyer several times and she basically told me that it was Ally's responsibility to get the reaffirmation paperwork to me in a timely manner (90 days) and that if they never bothered to send them then I do not have to worry about it...pay the loans...stay current and never fall behind more then the grace period and never worry about it again! She specifically told me not to contact Ally about it as they would not speak to me anyway.

However my head got to buzzing today....the Law in my state says that I have to state my intentions which I did...it was to reaffirm....I knew that neither my lawyer nor the trustee would approve it....everyplace I research says that If you do not reaffirm, but keep current on the payment of the debt, you can retain possession of your vehicle however I also found in my research that this "fourth option", "pass through" or "drive through" was prior to the 2005 changes in the law and now the courts are unclear as to whether this option is still available and the only leg you have to stand on IF they do repo your car is that you stated your intentions AND you signed the reaffirmations papers in a timely manner (which I didn't because I never got them) then you might have a chance to get your car back because it was not your fault the court did not approve it but that you did everything you could to reaffirm and it was out of your control thus not a breech of contract....and regardless if you keep your payments up to date that they can absolutely repossess your car....even years later....like when you have it nearly paid off and have a lot of equity in it! There is nothing protecting you if you don't reaffirm.... Ally never sent my reaffirmation papers....but now I want to call them and see if they were indeed sent and possibly not received...

Anyone interested in discussing this with me....I'm sorta panicking

IOBA · ‎08-31-2016

Food for thought...

During the BK process, Ally is not allowed to contact you. They are not allowed to accept payments either.

So...are they accepting your payments? If they are, or did at any time after they were notified of the BK filing, I would argue that shows that Ally understood your intenet to keep the vehicle. I'd keep paying until the end of the loan and then ask for the title. Remove Ally from the insurance AFTER the loan is paid off.

Scupra · ‎08-31-2016

IMO I think you should exercise the "stay and pay" option. It is VERY rare that reaffirming is best for the debtor.

Anonymous · ‎09-01-2016

That's a great point! Yes I have always stayed current on my car loans with Ally and through the "stay" process I did pay them on time and called in confirmation numbers because I was locked out of their online system and had to use a bill pay option so I wanted to make sure each payment was received! At no time did they refuse my payment! I called and they said they sent reaffirmation papers and that the account says that we were opting to reaffirm...she told me that while they reserve the right to repo my vehicle that if my payments are current that would not usually happen but that it is decided on a case by case basis. Spoke to my lawyer and they said that if I were current on payments and they repoed my car that they could take them to court over it....the line is so grey now that new laws were passed in 05....all I can do is keep the payments paid and hope that everyone is right and that after the loan is paid I will get my title. I do not intend to take them off the insurance and lien holder....they still hold an interest in the vehicle and might cause them an upset if I took them off the insurance. Thanks for your input! A side note....I have a **bleep**ty lawyer who treated me like I was crazy to worry about these things and that she had told me it was not an issue and that by me continuing to question it was obliviously irritating her...if they come repo my car...even with being current on all payments...I am going to end up with a case against my lawyer for misrepresentation!!!

Anonymous · ‎09-01-2016

Agreed....the lawyer and trustee both said they would not sign off on it....my worry is that Ally says they sent the papers....my lawyer says they did not...I did not sign the reaffirmation papers....I feel like at least if I signed them and then the trustee said no then I can prove that I was willing and intended to keep the contract and made timely payments and stayed current would all give me that little bit of security if they were to try something shady! Ally says they sent them...My lawyers says they never got them...In all honesty if I knew then what I know now about the quality of lawyer that I hired I would have looked for a better one....so I know in my heart that those reaffirmation papers are sitting on the lawyers desk covered with files and folders and that they are rolling their eyes because I am causing them more work and I sit and worry over it!

0REDSOX7 · ‎09-02-2016

I did the stay and pay option with Honda until I found something new and wanted to ditch the cars - no issues whatsoever. I think it's best. Yeah - you will lose the credit reporting part of making the payments, but, you can drop the car whenever you want to should you want a new one.

BK Discharge 2/11/14

Currently in the garden.

jim44 · ‎09-02-2016

@IOBA wrote:
Food for thought...

During the BK process, Ally is not allowed to contact you. They are not allowed to accept payments either.

So...are they accepting your payments? If they are, or did at any time after they were notified of the BK filing, I would argue that shows that Ally understood your intenet to keep the vehicle. I'd keep paying until the end of the loan and then ask for the title. Remove Ally from the insurance AFTER the loan is paid off.

If you don't owe more than the car's value, if you can afford the payments and if you really like the car then I'd say keep it and make the payments until it's paid off. You can use it as a trade credit and if your state allows receive a sales tax reduction.