If you reaffirm a debt during a bankruptcy, how does it show up on your credit report? Does it lower your score if you stay with your same terms? My parents co-signed for a vehicle for me and I do not want my problems affecting their credit score/report. I am considering filing bankruptcy (Chapter 13), but I believe you have to include all debts in the bankruptcy and even if I continue to pay, I am under the assumtion that it will show up as "inc. in Chapter 13 bankruptcy" on their report. Soooo.... I was thinking maybe the chapter 13 (or a 7) with a reaffirmation deal? The payment is low, so I am not worried about that - it is all my other payments I am worried about. Thanks for any help you can provide!
I don't know much about the legal affects of reaffirmation or not reaffirming, but purely from a credit standpoint, it will help you in that it will keep reporting. It will show up as included in BK, but there should be a "reaffirmed" notation, then all future payment history can be reflected. Terms of a loan are not a factor in credit scoring.
Yes, unfortunately your bankruptcy will also affect your parents' credit ratings, since they're co-signors. Don't know if under the new bankruptcy laws reaffirmation payments are reflected/reported by creditors to the CRAs. And even if they are your and the cosignors' credit history takes a hit.
If you indeed intend to reaffirm this debt, then you may want to have your parents investigate if the loan can be moved to their name(s) only. Sometimes loans can be transferred. I don't know if there are any negative marks on this account to date, but you may want to investigate if this loan can be transferred, sometimes they can. Then, you would need to make the payments for your parents to ensure no damage to their credit.
My husband, several years ago, reaffirmed a vehicle loan during a Ch. 7; it was with Ford Motor Credit he had never had a late payment on *that* account before or after BK. The loan basically would show up on his credit report, but with no new notations or reporting; it was as though it just quit updating and didn't show anyting neg or positive. We even called FMC since it WAS a "good" account and they said something to the effect of a BK didn't really impact that account since he was just paying it as usual with no modification to the terms. He disclosed it during BK, but the BK didn't change the payment amount, rate, etc--don't know if that's the case w/ Ch. 13. Ford considered it a good account and financed vehicles for him in future years post BK, so they didn't consider it a neg. Hope that helps a bit.
When you say "several years ago" - was that under the old bankruptcy laws, prior to October 17, 2005, or already under the new laws? Many of the old laws were changed.
This was pre-2005; however, he would have qualified now, as well, under the "means test" for median income (and COL expenses per IRS) in Texas and would have been able to file Ch. 7. Texas does not pay state employees or teachers very well, but that's another discusssion altogether. So, yes, it was pre-2005, but in his case, the laws would not have affected him based on today's BK laws (I actually checked to make sure).
Thank you Thank you everyone for your helpful insights! Does anyone know if you HAVE to include all debts/loans in a Chapter 13 bk? I really do not want to include this auto loan. We also work at a hospital and have bills there that we are paying timely on (comes out of our pay check and I would rather my employer NOT know that we are filing. Thanks!
