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Okay this is my question, I filed for chapter 7, I was planning on keeping my car but I never signed a reaffermation agreement

Chicago, IL |

And now I don't know what to do the company will not give any info on the car loan they say my lawyer has to contact them and the lawyer says its a discharge case that they can't help me no more and that if I didn't signed the reaffermation agreement that the car was included in the bankruptcy. But what do I do with the car just keep and and not pay it........ I am soooo confused.... help please....

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Attorney answers 3

Best Answer

All debts, including your car loan, are (or should be) included in your bankruptcy petition. Your obligation to pay on your car loan should be discharged with your Chapter 7 discharge.

The only way to re-obligate you on that loan is to sign and have a judge approve the reaffirmation agreement. It appears that this did not happen. Here are the possible outcomes:

1. You keep paying on your loan and keep your car despite the lack of enforceable agreement against you. Most finance companies are perfectly happy to receive your money and let you keep the car (even though they technically might have the right to repossess). Ford Financial and some credit unions might repossess your car, however, even if you remain current. I suggest you contact your finance company and confirm what is their policy.

2. You don't pay on your loan and either voluntarily surrender your car or allow them to repossess it. If your loan obligation was discharged, then the finance company should have no recourse against you for any deficiency between what they sell the repossessed car for and what you owe. If you owe less than the sales price, then they should pay you the difference (or better yet, if you want to get rid of the car, you may want to sell it yourself and keep the difference).

3. You keep making payments and they repossess the car anyway. See #1 above - this usually does not happen, though it could - especially with Ford or perhaps a credit union. Call your finance company.

Note that in many cases you should be able to qualify for a high interest car loan if you need to replace your car. You may want to check with, as I send my clients to them for replacement car pricing.

Note that I am not in your area and can't comment on your case specifically. Your attorney should explain all these things to you. Good Luck!


Most bankruptcy attorney's I know won't represent you on a reaffirmation as part of the flat fee package. It's considered an extra fee for an extra service. Once your discharge is granted, your attorney's work is done & (s)he doesn't owe you any more legal services without an additional fee.
If you reaffirm, it is as if the loan wasn't included in the bankruptcy. If down the road you can't pay for the vehicle, they can repo it & sue you for the balance you owe.
On the other hand, lets say you don't reaffirm & don't pay. They can pick up the vehicle but can't sue you.
If you don't reaffirm but you do pay? Some of the lenders will pick up the vehicle anyway, even if your payments are current, others will let it slide.
Good luck!


By not reaffirming on the car loan, you are no longer liable on the note. Therefore, you wont be liable for a deficiency if they decide to repossess the vehicle and sell it. Keep in mind that the creditor is a secured creditor and can repossess at any time. From my experience, most creditors (Ford being the exception) do not repossess if you stay current on your payments (they don't want the car they want your money). Whether they repossess also depends on how much you still owe and how much the car is worth. If you owe a small amount and the car isn't worth much, then it is unlikely that they will repossess since the creditor will incur the repossession costs.