Just filed BK - no what?

You shouldn't show a repo if you give the car back in the BK. The advantage of not reaffirming the cars is that you can give them back later and not have to deal with negative equity. However, if you DO give the car back after the BK, you could then get hit with a repo listing.

If you want the advantage of the car payment in rebuilding your credit, you will have to reaffirm.

 

I would see if you can get reaffirmation papers in writing to avoid issues down the road. If you do that, be sure that the cars and house are in fact, reaffirmed (paperwork submitted" and show that on your CR's.

In actuality, I was not aware that you don't need reaffirmation papers in some states. I am sure your lawyer know's her stuff. Just be sure that the correct papers are filed in time before discharge. You can't re-do it later!

 

You should be able to reaffirm your mortgage without problems. Car leases, though, often say that if you file BK then you are in breach of the lease and that they can demand the car back. Many lessors just let you keep the car and make the remaining payments. But check with your attorney as to your lease and Ohio's repo laws. If you miss even one payment next year some time, they may be able to repo the car without warning.

 

There are some states where you don't have to reaffirm the debt to keep the collateral as long as you continue to make payments.

This has both advantages and disadvantages. If you give the car back later, you don't have to deal with a deficiency balance. However, if you miss a single payment, they can come get the item no questions asked. You also don't get the benefit of future payments on the item rebuilding your credit unless you reaffirm.

Even in other states, some companies will let you keep the collateral as long as you continue to make the payments. I know Ford will let you keep the car as long as you make the payments, regardless of whether you reaffirm or not.

 

Re: Re: Just filed BK - no what?

While this is true, it's a scary thought. Even though the debtor doesn't have to reaffirm a contract or lease, once they file BK, they technically have no further contractual protections unless they reaffirm. If I were a debtor/consumer in that position, I'd send a letter to the lender or lessor and basically say something like, even though you don't require reaffirmation, I'm still deem the contract/lease terms to be valid and in full force and effect and I waive no rights thereunder, or something like that.

 

Re: Re: Just filed BK - no what?

Just be careful that you know exactly what is reaffirmed BEFORE your discharge and make sure that the reaffirmation papers are filed with the court. Call the bankruptcy court and ask for your case manager who should be able to get details on any paperwork that the courts have received. Do not let your bankruptcy be discharged until you call your creditors and make sure that what you want reaffirmed has been reaffirmed. I did not know to do this and I am majorily screwed now. I have to re-open my bankruptcy, pay $155 to do this, and more than likely pay another lawyer to send the reaffirmation to my creditor.

I also had a lease and a mortgage. My lawyer did not reaffirm my mortgage, the wordage he used was "debtor to retain collateral and continue to make payments." There is now a lein on my home, my credit report shows that my mortgage is "included in bankruptcy" 4 1/2 years of excellent payments are wiped out although the creditor IS reporting payments to my CR as of discharge date.

As for my car lease - Bank 1, did not reaffirm my lease (as my lawyer requested - but lawyer didn't even send reaffirmation agreement). Bank 1 allowed me to keep my car, have not sent me any statements since February, and I have no contractual obligations to them. I simply turn it in whenever I want. I do not have to pay over-mileage fees, late fees or a fee to break my contract. My credit report states "included in bankruptcy" and they are no longer reporting my payments, they also wiped out 4 years of good payment history. It is 9 months after my discharge and I just found all this out.

I was a complete dummy. I wish I would have known exactly what reaffirmation meant, I wish I would have talked to my creditors to find out if they were going to send me a reaffirmation or if I was supposed to send them one (in the case of my mortgage, they expected me to send THEM one if I wanted to reaffirm).

My lawyer wanted to protect me in the event that I was unable to pay my mortage or my lease. By included every debt in my bankruptcy, I can't be sued if I don't pay. However, this is not want I wanted to do. I knew I could continue to pay my mortgage and lease on time and would not default on them. I did not want them listed in my bankruptcy, I did not want a fricken lien on my home!

Okay, sorry so long but I have just learned in the last week that I royally screwed myself by not knowing the law and assuming my lawyer would do what was in my best interest.

Good luck,
Claudia