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Strange Letter From GM Financial

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CostantinoA
Established Contributor

Strange Letter From GM Financial

Hello.  My attornies office received this letter 5 days after my 341 meeting.  It says that Retain and Pay is no longer an option under the current Bankruptcy Code.  I called my attorney and they said that is false.  It is a scare tactic to get you to reaffirm.  Has anyone else experienced this?  Do you think they are going to try and pull something once the case is discharged?

 

 

Experian - 695 (4Y1M AA, 33 INQ)
Transunion - 686 (1Y5M AA, 30 INQ)
Equifax - 726 (3Y1M AA, 4 INQ)
Total Credit Lines: $99,387
Message 1 of 4
3 REPLIES 3
texasguppie
Regular Contributor

Re: Strange Letter From GM Financial


@CostantinoA wrote:

Hello.  My attornies office received this letter 5 days after my 341 meeting.  It says that Retain and Pay is no longer an option under the current Bankruptcy Code.  I called my attorney and they said that is false.  It is a scare tactic to get you to reaffirm.  Has anyone else experienced this?  Do you think they are going to try and pull something once the case is discharged?

 

 


From GM's website under FAQ:

 

"A Reaffirmation Agreement is an agreement between a creditor and debtor(s) who has filed bankruptcy stating that the debtor(s) will honor the terms of the initial contract initiated with the creditor.

You are not required to sign a Reaffirmation Agreement. However, by executing a Reaffirmation Agreement with GM Financial, you will resume receiving monthly statements on your account, be able to access your account via our website, make payments via that website and be eligible for deferments on your account, once your case has been discharged.

Not all services are available to customers who have been discharged in a bankruptcy case but not reaffirmed their debt with GM Financial. If you wish to reaffirm your debt with GM Financial, a Reaffirmation Agreement must be signed – by you, your attorney and GM Financial – and filed in a timely manner with the Bankruptcy Court. If you are not represented by bankruptcy counsel, the Bankruptcy Court must approve the Reaffirmation Agreement before it is a valid, binding agreement. It is your responsibility to obtain such approval.

GM Financial urges you to discuss your obligations as a debtor in bankruptcy with your bankruptcy attorney. Account terms are not modified in a Reaffirmation Agreement with GM Financial."

Message 2 of 4
despritfreya
Frequent Contributor

Re: Strange Letter From GM Financial

 

First and foremost, this is a form letter that this lender uses in most, if not all, consumer Chapter 7 cases.

 

Second, the above copy and paste of the info from GM’s web site is probably more accurate as to the reality of how GM handles its secured loans when there is a bankruptcy.


Having said the above, the first sentence of the letter is technically accurate. The Bankruptcy Code requires you to file a Statement of Intention. While you can input what you want when you check off the election to retain, the only three options permitted by the Code as it relates to personal property is reaffirm, redeem or surrender. You have 30 days from the 341 to act on your intention. If you fail to act on your intention within that time the protection of the automatic stay is lifted.

 

Judges do not like the inability to retain and pay. As a result, most judges have found a way around the requirement to reaffirm. Google In Re Moustafi or “Moustafi Order” for more details of how at least one Court has decided the issue.

 

When I receive a Reaffirmation Agreement I send it to my client with specific instructions. I, as the attorney, do not sign the attorney certification. The client completes the form and sends it to the lender. The lender files it with the Court. The Court sets a Hearing because the certification is not signed. My client and I attend that Hearing and, depending upon the Judge’s procedures, the Reaffirmation Agreement is denied. The Judge then tells my client that so long as payments are made and insurance is in place the lender “better not” try to repossess. The premise behind this is, while the Code requires that the Debtor act on his/her intentions, the Code does not require the Court to approve the Agreement. So long as the Debtor has acted upon his/her intentions the lender is stuck.

 

Ask your attny how your district handles this matter. You need to make sure that “doing nothing” but retain and pay is not going to cause a problem down the road (based upon GM website it looks like you would be ok but verify this). Your attny will know how things are done in your location.

 

The up-side to not having the Agreement approved - should you fail to make the payments and/or keep the vehicle properly insured the lender can repo but you will owe nothing.

 

The down-side to not having the Agreement approved - no on line access in most cases and no reporting of payments.

 

Des.

Message 3 of 4
CreditCuriosity
Moderator Emeritus

Re: Strange Letter From GM Financial

@CostantinoA I removed your image as it contained contact info and personal information that cannot be shared public on the forum.  Feel free to repost the image with that stuff blocked out if you so wish

Message 4 of 4
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