How do I reaffirm my vehicle after filing Chapter 7 bankruptcy? 26 Answers as of June 23, 2011

I filed chapter 7, and im trying to reaffirm my vehicle. Is it true that in that process is it true that the lender is required to lower the refinanced amount to the blue book value of the vehicle.

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Ellahie & Farooqui LLP
Ellahie & Farooqui LLP | Javed Ellahie
Reaffirmation in Chapter 7 is formal procedure that requires you to sign and a Reaffirmation agreement and have the court approve it. If you are not represented by an Attorney, the court has to consider whether your budget allows you to commit to a Reaffirmation or not. The lender does not have to agree to anything but you can try and negotiate as they may not be to keen to pick up the car. While failing to Reaffirm allows the lender to pick up the car, most lenders are not that aggressive and you will "probably (no guarantee)" be able to keep the car if you stay current on the payments.
Answer Applies to: California
Replied: 6/23/2011
Law Offices of John J. Ferry, Jr.
Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
No, it is not true that the lender must change the loan terms. However, they may be willing to do so to ensure that you sign the reaffirmation agreement. This can vary, so talk to your attorney.
Answer Applies to: Pennsylvania
Replied: 6/21/2011
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
No, that is not true at all although you can ask.
Answer Applies to: California
Replied: 6/21/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
No, that is not true, but you can certainly negotiate any terms you want. To reaffirm, you must file a reaffirmation agreement with the court prior to receiving your discharge. You must then attend a hearing with the Judge in your case to approve the agreement.
Answer Applies to: California
Replied: 6/21/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
You have to enter into a reaffirmation agreement with the lender. The lender does not have to refinance for anything less than original terms but you may negotiate it down to something more reasonable, especially if the lender feels that you might prefer to just walk away and not reaffirm on the note.
Answer Applies to: Indiana
Replied: 6/21/2011
    Law Offices of Dennis Baranowski
    Law Offices of Dennis Baranowski | Dennis Baranowski
    Typically your auto lender will forward a reaffirmation agreement to you or your attorney. If your case was filed several weeks ago and you wish to reaffirm the auto loan, you should contact the lender and request that it forward an agreement to you as soon as possible. With respect to your question concerning the lender being required to lower the principal to blue book value, the bankruptcy code does not require the lender to change any terms for a reaffirmation. You may have reaffirmation confused with redemption which allows you to pay the fair market value for the vehicle. You should consult an experienced bankruptcy attorney to assist you with your options concerning your auto loan.
    Answer Applies to: California
    Replied: 6/21/2011
    Law Offices of Virginia E. Fortunato
    Law Offices of Virginia E. Fortunato | Virginia E. Fortunato
    You are required to reaffirm a debt after filing a Chapter 7 if you intend on keeping a vehicle which was financed. The reaffirmation is basically a contract you sign after filing for bankruptcy promising to continue to make payments on the reaffirmed debt. If for any reason you default the creditor could repossess the vehicle and sue you for the deficiency. I think based on your question you are confusing reaffirmation with redemption. It is possible to file a motion to redeem the vehicle in which you pay fair market value for the vehicle. Usually people who file a Chapter 7 do not have funds to pay-off their car. There are banks which will give you a new loan so that you can redeem your car but BEWARE as it is not always a great deal. You need to review the numbers before taking such a loan because the interest rate on the redemption loan tends to be at 25% or close to 30%.
    Answer Applies to: New Jersey
    Replied: 6/21/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    The car financing company is responsible for sending a reaffirmation agreement for you to sign (along with your lawyer). They do not have to take the value down to the actual value. Generally they have you reaffirm on exactly the same terms and for the same amount as you owed prior to filing. Sometimes your attorney can talk them into lowering it but not always.
    Answer Applies to: Michigan
    Replied: 6/21/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    There are"3 r's" in bankruptcy as to secured debts. Insofar as a vehicle you have the right to return it, to redeem it or reaffirm it. The fist two are absolute rights the latter requires mutual agreement. In a reaffirmed debt you can try negotiating for a lower balance, lower monthly payment or lower interest. However the lender does't have to agree to change the terms of the loan. If you redeem the vehicle you pay in cash in full the present value of the vehicle if it is lower than the loan balance. Usually, this is impractical unless someone can loan you the money.
    Answer Applies to: California
    Replied: 6/21/2011
    Jackson White, PC
    Jackson White, PC | Spencer Hale
    You need to request a reaffirmation agreement from the creditor. The creditor is not required to lower the loan amount. They can elect to, but there is no legal requirement to do so. If you want to lower loan amount you would have to do a redemption of the car. This is where you force the creditor to accept the fair market value of the vehicle in full satisfaction of the debt.
    Answer Applies to: Arizona
    Replied: 6/21/2011
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
    You can reaffirm a debt after bk, yes. However, it is up to you and the creditor what the terms are. They are not required to go with blue book.
    Answer Applies to: California
    Replied: 6/20/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    Reaffirming means that the loan will survive the bankruptcy intact. While a lender may on rare occasions alter the terms in a chapter 7, what you are looking for is a chapter 13 "cramdown" which is only available on a vehicle you financed more than 2.5 years before filing the chapter 13.
    Answer Applies to: Michigan
    Replied: 6/20/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    It's often ill-advised to reaffirm a vehicle after filing a chapter 7 bankruptcy; sometimes it's not possible to do so if your budget doesn't reflect ability to repay the loan. You must contact the lender and enter into a reaffirmation contract to be filed with the court. Reaffirmations don't compel the lenders to lower the balance due.
    Answer Applies to: California
    Replied: 6/20/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    You will sign a reaffirmation during the bankruptcy which the creditor will then file with the court. If the judge handling your case has issue with this, he or she will schedule a reaffirmation hearing near the end of your case.
    Answer Applies to: Oregon
    Replied: 6/20/2011
    Daniel Hoarfrost, Attorney at Law
    Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
    Usually, in order to reaffirm, the lender sends you a reaffirmation agreement.Loans are not modified in a Ch 7.
    Answer Applies to: Oregon
    Replied: 6/20/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    You reaffirm a debt in Chapter 7 by entering into a reaffirmation agreement with the creditor, and submitting the reaffirmation agreement to the court for approval. There is no modification of any debt by the bankruptcy court. The only modification would be if your creditor agrees to it, so this is a matter of negotiation between the creditor and you.
    Answer Applies to: California
    Replied: 6/20/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    No, it's not true, which is one reason why many lawyers refuse to sign the document. If you sign a reaffirmation you're taking the car out of the protection of bankruptcy so that if, for some reason you can't pay it, you're still liable. Without reaffirming, you keep on paying but if you can't pay later, then you let them take it an owe nothing more. EXCEPT that Ford and maybe Chrysler will require a reaffirmation. Don't do this without a lawyer, please!
    Answer Applies to: Virginia
    Replied: 6/20/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    No, the lender is not required to give you any concession at all.
    Answer Applies to: Virginia
    Replied: 6/20/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    After you file for bankruptcy, your lender will send a reaffirmation agreement to you or your attorney. Generally you should not sign a reaffirmation agreement as most lenders will allow you to keep your car if you continue to pay. However, if the lender reduces the interest rate, you might want to consider signing the agreement.
    Answer Applies to: Washington
    Replied: 6/20/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    No, it is not true. It is up to the lender to decide whether it wants to or needs to make any changes to the loan terms to get you to sign a reaffirmation agreement. If you do not sign it, the lender can repossess the vehicle at the closure of your case.
    Answer Applies to: California
    Replied: 6/20/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You are mixing up "reaffirm" and "redeem." You reaffirm at the same contract rates. The lender has the responsibility of sending you the reaffirmation agreement. To redeem, you need to file a motion asking the court to lower the value of the vehicle to the KKB value and then you have to pay that amount in a lump sum. There some business that will set this up for you and lend you the money to do it but their interest rates are very high.
    Answer Applies to: California
    Replied: 6/20/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    The reaffirmation agreement must be provided to you by the lender. You must request this from the lender. If you filed your case without the benefit of an attorney, you will need to appear in court and convince the judge that you can afford the vehicle. In order to do this you must have included the payment in your schedule j and must have at least some positive income. No, the car loan lender does not need to lower the loan balance or the interest if they do not want to. Sometimes they may lower these voluntarily but usually not.
    Answer Applies to: California
    Replied: 6/20/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Your post indicates that you made the usually catastrophic mistake of filing pro se. Bankruptcies usually turn into financial disaster when you do that. You need a lawyer. Retain one now. The fact that you do not even begin to understand reaffirmation is an indication that you failed to do even the most basic of needed homework before filing. You may or may not have the right to reaffirm. Note that without counsel you CANNOT reaffirm unless the Judge allows it. With counsel, depending on your numbers, court approval may not be needed. Note that reaffirmation, if the car is worth less than what you owe, could be a very bad idea. Your perception that the lender must change the terms or drop the balance is simply 100% wrong. If the lender agrees to reaffirmation at all, and it will not happen unless they agree, usually they will offer you exactly the original terms. In some cases, a good attorney may be able, with his experience, to negotiate better terms. There may be better options that reaffirmation, such as a redemption loan, and if you don't know what that is, you also need counsel.
    Answer Applies to: Georgia
    Replied: 6/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Contact your lender and request a reaff agreement. Not true. They sometimes lower APR but rarely balance owed.
    Answer Applies to: California
    Replied: 6/20/2011
    The Law Office of Brian Nomi
    The Law Office of Brian Nomi | Brian H. Nomi
    Not true at all. Sometimes they do, which is more and more rare. Normally you must pay the full amount due in a reaffirmation. For further information, its best to consult with an experienced attorney. Any good attorney will give you a free initial consultation.
    Answer Applies to: California
    Replied: 6/20/2011
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