to feaffirm or not reaffirm that is the question?

[needhelpinflorida]

Ok so filed BK7 and have a vehicle that i owe approx $7500 on but KBB indicates is worth $5000.

Sp other than keeping the car what are the benefits to reaffirmation? 

Does my past good payment history matter in my rebuilding efforts post bk d/c?

Will the finance company negotiate with me on APR etc to make the deal worth keeping or reduce the amount owed to reflect actual value etc etc

Will keeping my car and current loan be more beneficial than starting afresh with a new loan after my d/c?

I guess my main focus is what is best once i begin the task of rebuilding my credit profile after this BK is finished.

Any help would be very gratefully received

Needhelpinflorida

[0REDSOX7]

Why would you reaffirm, does your state allow for the option to maintain payments but not reaffirm? It would be option 4 on your statement of intentions.

We are doing option four ourselves because we had so much negative equity. Out cars are financed with Honda Finance. We would have surrendered them but they would have fought the automatic stay and made us give them back right after filing.

[0REDSOX7]

We will surrender ours about a month or so after discharge and secure new financing for new (to us) vehicles to help rebuild.

[needhelpinflorida]

Yes im led to believe that icould do a 'passthrough' which would mean just continuing paying and keeping the car. Iguess i would be happy to do that if it helped my credit post bk d/c

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[0REDSOX7]

That it won't do. It will show as IIB and a zero balance.

Not all lenders allow it, so, you'd want to check with yours. The upside to doing the pass through is that it would allow you to surrender the vehicles back whenever you want to.

[needhelpinflorida]

So how will it be reported post bk? Is being IIB which i know is bad and zreo balance (which i thought might be good for debt utilization and fico?) If i make payments are they reported as late or paid as agreed on a zero debt account? Will subsequent paymets be beneficial or not to my rebuilding?

Again i really thank you for your response.

[0REDSOX7]

If you do the pass through option, payments will never be reported post BK. Any lates or a repossession will never show. It will always be IIB and a zero balance. Forever.

[StartingOver10]

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@0REDSOX7 wrote:
If you do the pass through option, payments will never be reported post BK. Any lates or a repossession will never show. It will always be IIB and a zero balance. Forever.

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^^^This is right.

The question you need to ask yourself is this: why would you reaffirm the debt? About the only reason to reaffirm is if the payments are reasonable and the debt is low on the vehicle. Most of the time it is far better to NOT reaffirm any debt at all. Use your fresh start to its best advantage.

If you are filing BK, it doesn't matter if you have 5 tradelines reporting iib and zero balance or 20 tradelines reporting iib and zero balance. So not wanting the iib and zero on that particular TL doesn't help your credit from a score POV.

[CrazyCatLady14]

That is assuming the judge will allow you to reaffirm the vehicle.  If the car is worth less than what is owed and depending on your current liabilities they may deny your request to do so.

I personally think surrending the vehicle prior to your court date is the right way to go if you don't think you can handle the payments.