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To reaffirm or not?

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MDCruiser
Valued Member

To reaffirm or not?

I have my 341 meeting for CH7 on 4/23. I can't decide whether or not to reaffirm my car loan. Car is a year old with 17k miles, I bought new. It also has a 125k warranty and free oil changes for life. It's worth $15k and I owe $25k, however my interest rate is 0%.
I know post BK I'm not going to get anything close, but paying $10k more than the car is worth is what's got me questioning.
I primarily am thinking of keeping the car, since it's pretty new and has a warranty but that negative equity is the only downside. I'm burning Cap1 ($10k) and a few credit unions in my BK so I'm not sure I'll be able to luck out at 6-9% post discharge. I also thought about paying cash for a beater for $5k or so.
Any help/insight appreciated!
Message 1 of 21
20 REPLIES 20
Anonymous
Not applicable

Re: To reaffirm or not?

If your lender does not repo on a loan you don't affirm, then there's no reason to affirm it. the other thing I'd be consdering is if you can get a new loan or 401k loan to redeem the car for what it's worth.

 

If you reaffirm the loan and loose your job a month after discharge, you remain liable for the loan. If you can "retain and pay" without reraffirming or abandoning, then I'd do that.

Message 2 of 21
MDCruiser
Valued Member

Re: To reaffirm or not?

It's Ford Credit, they're known to repo if you don't reaffirm. I was hoping they'd reduce the principal to keep me from letting them repo the car. I can afford the payments, I just hate paying so much more than the car is worth.
Message 3 of 21
nursepower
Frequent Contributor

Re: To reaffirm or not?

Why are you so upside down if you don't mind sharing?
BK DC 10/18/18
Walmart $400 | Target $500 | Playstation Visa $750 | Petco MasterCard ? | Best Buy Visa $2000 | Cap 1Quicksilver $2500 | Ollo $2700 | Kohl's $3000 | Comenity $3200 | Dell $4000 | Skypoint FCU $5000
Last app 6/2/21
Message 4 of 21
MDCruiser
Valued Member

Re: To reaffirm or not?

I paid $3k off MSRP for the car, I didn't roll over any negative, and I'm financed at 0%. I added GAP and warranty for $2k total so didn't even finance at MSRP out the door. These cars (Fusion) just don't hold value.
Message 5 of 21
MDCruiser
Valued Member

Re: To reaffirm or not?

I talked to my attorney about this. Either I reaffirm and pay all of the balance, or I don't and they come take my car the day after discharge. Decisions, decisions...
Message 6 of 21
Anonymous
Not applicable

Re: To reaffirm or not?

Let it go and buy something for cash.

 

$5k isn't even beater level . . you can get a pretty nice car for that.

 

Save like crazy after your discharge . . it's addictive Smiley Wink I have a five figure savings account for the first time in my adult life. I've had new car fever for years, but socking away 35% of my income feels much better.

Message 7 of 21
MDCruiser
Valued Member

Re: To reaffirm or not?

After 4 years I can hit my 401K and do a loan for most of a car if need be. I found a nice $5k car I'm going to see tonight.
Message 8 of 21
Anonymous
Not applicable

Re: To reaffirm or not?


@MDCruiserwrote:
After 4 years I can hit my 401K and do a loan for most of a car if need be. I found a nice $5k car I'm going to see tonight.

Don't touch your 401k for a car.

 

In 4 years with a successful rebuild, you can get a crazy low rate or another 0% offer if you really must finance a car.

 

I have my main savings and have just started a separate car fund. I have my eye on several new vehicles now that I will pick up used in a few years w/ low mileage for cash Smiley Happy

 

Good luck!

Message 9 of 21
MDCruiser
Valued Member

Re: To reaffirm or not?

I'm going to see this vehicle tonight which I can pay cash for. It'll last at least 2 years I hope! I've never NOT had a car payment since 1999. That's one reason I'm going to let my car go and buy something for cash. I'm hoping to start a trend for myself.

This is how I used to think.. my car was $400 a month. That's nothing on an income of almost $60k, but it adds up if I'm saving that money.
Message 10 of 21
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