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Bk Auto Loan Reaffirmation

Discuss the legalities of Bankruptcy Law

Bk Auto Loan Reaffirmation

Postby Wokaihwokomas » Sun Jun 05, 2016 4:27 am

I am in the proccess of Chapter 7 BK.  I wanted to keep my car loan out of the BK. Chase, my fincance company, sent my lawyer a reaffirmation agreement for me to sign.  I have never been late or missed a payment since I got the car over two years ago.  My lawyer said not to sign it, and that they wouldn't repo the car unless I missed payments.  I would just like a second opinion, because I cannot risk losing my car.  I'm also am wondering if I don't reaffirm, how it will show on my credit.  If I pay off the car, will it show paid and will it show I am current on payments??

Thank you
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Bk Auto Loan Reaffirmation

Postby Fairleigh » Sun Jun 05, 2016 11:27 pm

Under the bankruptcy code revised in 2005 the creditor can now insist you either sign the reaffirmation document or they can repo the car even if you're right up to date.  Now although they have that right, it doesn't automatically mean they'll exercise it.  The safest way is to reaffirm the debt, but remember it will be treated as if you never filed bankruptcy after that, so if the car blows up and you don't want it any more, for example, they can repossess & sue you for a deficiency balance.   Ask your attorney to clarify the bankruptcy code provisions that allow for a repo of a non-reaffirmed car debt.  Maybe he knows something we don't!  
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