My husband filed for bankruptcy last month. His 341 meeting is on may 24th. Most of his debts are from even before i met him. From 2012 and he has no new credit cards or debts other than the two autoloans.
Here is a little background on our car loans. We jointly signed an auto loan in feb 2017 and he traded in his 2015 prius for a 2017 coroalla in feb 2017 as well. Basically he has 45000 $debt in these two car loans. And we both drivers/couriers and we both need our cars for our income. My fully paid car got totaled so we had to purchase a reliable car for my job.So we intend to keep paying for these cars surely.Now our attorney just suggested that my husband reaffirm both loans. So when my husband filed the petition he selected 'reaffirming the car loans option'. I did a lot of research on this site and internet regarding reaffirmation and found out quite a lot of information that made us decide that he should not reaffirm but we keep the car loans current by making payments. Here is what i found out.
1. As joint account holder since i am not filing for bankruptcy , the bankruptcy information such as account included in bankruptcy should not appear in my report. This used to happen a lot before but now rhey use a different reporting system
There is site that explains this very clearly . We confirmed this with toyota as well. They told me to call them after discharge sp that they can report to my credit profile the loan as current since i keep paying on it and i have not filed for bankruptcy. Btw here is the link that explains about the metro.2.0 , which reports bankruptcy only on the person's credit who filed for bankruptcy and not the joint account holder.http://robertweed.com/2013/12/27/bankruptcy-co-signers-credit-report/.
I pulled both my husband's and my reports and in his report this account shows as closed and in mine it shows as open ,current ,paid as agreed. My husband will have his 341 on may 24th as i mentioned before so right now we are between filing and discharge.
2. My husband car has a huge negative equity. He traded in 2015 prius for a new corolla which was worth 18000 so basically he has total loan of 30000. From prius 12000 .I learnt that if your car has a negative equity then the lender would not repossess if you keep making payments nd not reaffirm.
3.reaffirmation pros are positive credit reporting and ruling out any possibility of repossession and online access to bill pay but these are not that important to my husband and me . My report wont be affected by our joint loan and he is ready to rebuild from scratch.
We pay from our bank and we can keep track of loan balance.
5. Cons of reaffirmation , due to unforeseen events if we miss one payment then they not only will reposses the car but sue you for money. And there is no guarantee that they will continue to report to bureaus after reaffirmation. We put a lot of miles on our car 200 miles a day so obviously car value will depreciate very quickly but his reaffirmed loan will not .
6. This was very important part in our decision making. We spoke directly with toyota motor credit. And they confirmed that reaffirmation is our choice . If we decide keep current on the payments then they will not repossess his car.
So we need to update this with the attorney . Although i was surprised why our attorney didnt educate us about this . I read most attorneys suggest against reaffirmation.
Those who have gone through this whole process please share your experience regarding reaffirmation . What do you guys suggest in our case ? Thanks! Sorry for any typos, typing from my phone. Also is it possible for me to refinance our joint car loan only in my name after the discharge? I will only do so if i get better interest rate than what is now
