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I filed Ch 7 bk and intended to reaffirm a car loan but was not able to due to negative DMI. Now now the repo people are here.

Ashland, VA |

Attorney could not sign the reaffirmation in good faith so it was not filed with the court. Attorney said it would just be rejected and it is "not how things are done in this district". The loan is with Ford Credit. Now, 1 month after discharge, the repo guys show up to take my car. What can I do about this? I am current on the loan and have never had a payment late. The car is insured and has always been. Ford is repo'ing because of the lack of reaffirmation. At the time of filing, my attorney said there was nothing Ford could do providing I stayed current on the loan and kept it insured. This all happened in the eastern district of VA if that matters. What can be done? What could an attorney do to allow me to keep the car?

Attorney Answers 4


  1. Whether you can "pay and ride" without a reaffirmation agreement depends on the loan company ("No" for Ford Credit) and also the particular court district and its decisions on this split-decision issue. If your attorney was correct about your district, then he/she should be able to get your car back. If he/she was wrong, then you probably won't be be to get your car back. In districts that don't support "pay and ride" without a reaffirmation agreement (like the one in which I practice), it may be possible to submit a reaffirmation agreement signed by you but not your attorney and then if the judge doesn't approve it, it still prevents a repossession because it was submitted to the court. This is a complex and varying area of bankruptcy law. I urge you to review the matter with your bankruptcy attorney and, if you're not satisfied, get the opinion of another one highly experienced in your local area.


  2. At the time the case was filed if your schedule of income and expenses showed a negative disposable income, i.e., meaning your expenses exceeded your monthly income, then the court may not approve a reaffirmation agreement.

    Reaffirmation agreement must be filed within 45 days of the filing of the case. If you are still within the 45 days and you can show that you can rearrange your expenditure to show you will have the monthly payment to pay for the vehicle, or you can demonstrate and have someone who may assist you with the payments, you can have your attorney ammend your schedule of income and expenses and file a reaffirmation agreement.

    This communication does not substitute legal advice, neither it creates attorney-client relationship.


  3. In Virginia, if the contract says that bankruptcy is a default, then the lender can repossess without a reaffirmation agreement or a redemption (paying off fair market value). Ford Motor Credit does repossess even if you are current. In this District, if you signed the reaffirmation agreement and sent it back to Ford, then you can keep the car as long as it is current and insured, even if they do not file it. Just because your attorney would not sign does not mean that you did not attempt to reaffirm which is all that is required. This District requires that you attempt to reaffirm before allowing pay and retain.

    [This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]


  4. To add some more to the previous answers, you can have a reaffirmation agreement approved even if income and expenses on the schedules are negative. It depends on what has happened since then and whether the attorney has signed the agreement.

    I want to stress that an approved reaffirmation agreement is not required to keep the car. However, YOU must sign A reaffirmation agreement and send it back to the creditor. If the court rejects it, which it will, then you keep the car as long as you are current and the car is insured. If the creditor refuses to file it, your attorney can do so and ask the court to reject it (I have done this before).

    [This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]

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