What are my options on a reaffirmation on car loan that is now worthless? 23 Answers as of July 01, 2014

I filed for chapter 7 on 1/2012 and bankruptcy judge granted a reaffirmation on an $11,000 car loan payable for 47 months. My car payments are current after two years. The engine just blew on car and car is now worthless. I still owe money on car loan.

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Baner & Associates | Sandra M Baner
Unfortunately, this is the down side of signing a reaffirmation agreement. You may want to confirm that the reaffirmation agreement was filed with the Court. If it was not, the debt was discharged. If it was filed then you remain liable on the debt. Sorry.
Answer Applies to: Wisconsin
Replied: 7/1/2014
Law Office of Marlin Branstetter
Law Office of Marlin Branstetter | Marlin Branstetter
If you reaffirmed the debt you remain liable for the remaining balance.
Answer Applies to: California
Replied: 6/30/2014
Ronald K. Nims LLC | Ronald K. Nims
Reaffirmation means that you agreed to the new loan terms. If you stop making the payments, the bank will repo the car and probably go after you for the any shortage between what they get for the car at auction and the amount of the loan. And that will ruin your credit rating. Once you have executed a reaffirmation and it's approved by the court, then the deal is done. You don't get to renegotiate the contract. One option you should consider is trading in the car and rolling over the loan on your new car. At least then, 1st - you'll have a functioning car; 2nd - you won't mess up your credit rating and 3rd, the lender won't be garnishing your wages.
Answer Applies to: Ohio
Replied: 6/26/2014
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
Reaffirming the auto loan made it just like you had not filed a bankruptcy as to that loan. You will owe the money even if the auto is not functional. Maybe you can negotiate something with the lender. If you had not reaffirmed, you would now owe nothing.
Answer Applies to: California
Replied: 6/26/2014
Law Office of Peter M. Lively
Law Office of Peter M. Lively | Peter M. Lively
Most judges will not approve reaffirmation agreements because denial of the reaffirmation agreement at the hearing before the judge provides you with protection from repossession merely due to the bankruptcy filing itself and as long as you keep payments and insurance current. It is past the 60 day reaffirmation agreement rescind period, so you are stuck owing the debt. Perhaps you can negotiate a settlement with this creditor. A wage exemption claim or a no discharge Chapter 13 Plan may be worth considering if this creditor aggressively collects the deficiency balance and you are not able to reach a settlement.
Answer Applies to: California
Replied: 6/26/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    Unfortunately since you reaffirmed the debt you are responsible for the loan into the future.
    Answer Applies to: Minnesota
    Replied: 6/26/2014
    Idaho Bankruptcy Law | Paul Ross
    This is the number one reason why attorneys do not recommend reaffirmation agreements. The reaffirmation agreement makes it as if you did not file bankruptcy on that debt and you are now liable for any deficiency.
    Answer Applies to: Idaho
    Replied: 6/26/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    Not many options. Sorry.
    Answer Applies to: Colorado
    Replied: 6/26/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    Since you reaffirmed the debt, you cannot walk away from it now just because the engine blew. You are on the hook for the remaining debt, unfortunately. Your only option is to attempt to settle the debt for less than you owe.
    Answer Applies to: Oregon
    Replied: 6/26/2014
    Stephens Gourley & Bywater | David A. Stephens
    Not many. If you reaffirmed the debt, you are again personally liable for the debt. If the car cannot be sold for enough to cover the debt, then you could be sued for the difference.
    Answer Applies to: Nevada
    Replied: 6/26/2014
    Law Offices of Robert P. Taylor
    Law Offices of Robert P. Taylor | Robert P. Taylor
    Unfortunately, that's the risk you run by reaffirming. You have no "bankruptcy" related option, other than filing a Chapter 13 and paying the balance in full over 3 to 5 years. This is why a generally recommend against reaffirming.
    Answer Applies to: California
    Replied: 6/26/2014
    Scott Goldstein | Scott Goldstein
    Sadly, when you reaffirm that debt is yours forever, or until paid off. The best bet is to try to work something out with the lender.
    Answer Applies to: New Jersey
    Replied: 6/26/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    You have a very short time to back out of a reaffirmation 11 USC section 524(c)(4) gives you only 60 days. Otherwise, you are stuck which is why most experienced bankruptcy attorneys never recommend reaffirming any vehicle loan.
    Answer Applies to: Nevada
    Replied: 6/26/2014
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    You should never reaffirm. Most experienced bankruptcy attorneys would have given you this advice. There is almost never a good reason to sign those agreements. Since you did reaffirm you own the debt. It is not discharged in bankruptcy. You will have to make arrangements to take care of it.
    Answer Applies to: Connecticut
    Replied: 6/26/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You would be stuck with a deficiency balance when it is sold at repossession auction.
    Answer Applies to: California
    Replied: 6/26/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Nothing, that's why you should never reaffirm the car.
    Answer Applies to: New York
    Replied: 6/26/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You signed the reaffirmation agreement, so you are responsible for the outstanding balance no matter what the car is worth now. Maybe it might be worth looking at having a used engine put it if you still owe a large balance?
    Answer Applies to: Michigan
    Replied: 6/26/2014
    Law Office of Pho Ethan Tran PLLC
    Law Office of Pho Ethan Tran PLLC | Pho Ethan Tran
    Unless the car is still under warranty or the manufacturer and/or seller of the car is at fault, you either finish paying off the car loan or deal with debt collectors in the future.
    Answer Applies to: Texas
    Replied: 6/26/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    You have to pay it or they are likely to sue you.
    Answer Applies to: California
    Replied: 6/26/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    Because you reaffirmed the debt, you have to keep paying it. You should get the car fixed.
    Answer Applies to: California
    Replied: 6/26/2014
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Yes you are obligated for the debt. You may need to see if you can get it fixed or give to back to car company and hopefully they will sell it for something which will lower the amount still owed.
    Answer Applies to: Florida
    Replied: 6/26/2014
    Law Office of Andrew Oostdyk
    Law Office of Andrew Oostdyk | Andrew Oostdyk
    A Reaffirmation Agreement re-establishes your liability on the vehicle. The terms of the Reaffirmation Agreement should be treated the same as a car loan that has not been included in a Bankruptcy case. You can call the Financial Institution that gave you the loan to discuss what options you have available to you.
    Answer Applies to: Texas
    Replied: 6/26/2014
    Stittleburg Law Office
    Stittleburg Law Office | Bernd Stittleburg
    None, once you signed the reaffirmation agreement you bound yourself to the vehicle and the debt.
    Answer Applies to: Georgia
    Replied: 6/26/2014
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