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Bankruptcy discharged, but have not processed reaffirmation agreement for car financed by Credit Union?

Salem, OR |

I have had my chapter 7 bankruptcy discharged this month, however, my lawyer's legal assistant sent me a reaffirmation agreement for my car. With a option for me to fill out, or they fill out for an additional fee. But now that the filing is discharged (!) what do I do with this? Do I process it out? Do I call lender (a credit union) and explain the situation? Should I be waiting for my car to get towed? Will this issue disturb my discharge? Could I ask anymore questions? ;-)

Some details I think are relevant: I have _never_ missed a payment for the car; I have the money in my monthly check to cover the cost of the car; i am 4 payments away before the loan is done & The agreement terms was merely the continuation of payments at the current APR.

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Attorney answers 3


I hate reaffirmation agreements. I hate them because if my client signs them and the car breaks down in the following months, the debtor is stuck paying for a vehicle they no longer want.

Several large auto finance companies insist on a signed reaffirmation agreement, and if they don't get one, they will repo the vehicle, claiming that the original contract is no good.

The best option for you would be to continue to make the payment to the credit union as long as you intend keeping the vehicle. However, you are running a risk that the credit union will not accept this & may take the vehicle even though your payments are current.

Thank you, US Congress, for creating this dilmmma!

Since your payments are almost completed, I would pay off the loan as quick as you can & hope that no problems arise.

Hope this perspective helps!


I don't think this is going to be a big deal. While the lender would like to have a reaffirmation signed and entered in your bankruptcy case, sometimes they let the debtor keep the vehicle without a reaffirmation agreement so long as the debtor is current.

However, there are some lenders that will repossess a vehicle unless it has a reaffirmation.

In your case it is not cost effective for the lender to repossess your car. WIth only four payments to go, so long as you are current, there should be no issue.


I agree with my colleagues on this one and, like Dorothy, I generally hate most reaffirmation agreements.

As for your questions, I will answer each in turn. What to do with it? File it away. Do you process it out? If you are asking if your should sign it, it is too late for it to have any real legal effect, anyway. In order to take effect, it must be filed with the court before discharge (there have been some exceptions in which the court will reopen the case and allow it to be filed, so long as it was at least signed prior to discharge and both parties agree). You can call the credit union if you want to and explain the situation. There is nothing they can do, except agree to accept payment and let you keep the car or not. Should you wait for the car to get towed? No, you should continue making payments and enjoy the car for as long as it remains in your possession. Will this disturb your discharge? No. It will have no effect on your discharge whatsoever. Could you ask more questions? I'm sure you could find a way, yes. ;-)

Actually, your details are pretty significant, particularly that you are current with only four months remaining on the loan. This means that even if they did repossess the car, redemption is probably not out of the question.

I hope this information helps.

The responses above do not form an attorney-client relationship, nor are they intended to be anything other than the educated opinions of the author. They should not be solely relied upon as legal advice for any specific purpose.