05 Oct Reaffirmations Part Three Cars, Trucks, Things With Wheels
Reaffirmation is the process in a chapter 7 where the debtor agrees to re obligates themselves on a debt and the lender lets them keep the collateral. The debtor makes the payments and keeps the car etc.
Reaffirmations of cars and things with wheels are treated very differently through the country even through out certain states. The main difference between reaffirmation in cars and houses is how state law treats the these loans. Cars can often be picked up if you are behind without any court order. It is important to review this with a lawyer in your own state.
Before the law changed under BAPCPA in October 2005 there was a split in the country. Did you need to sign a reaffirmation on a car? Some states the answer was know and just like a house if you were current you did not need to reaffirm on the debt. This is called ” ride through.” The debtor is current and keeps paying. They get to keep the car . The advantage to the debtor in not signing is that the responsibility on the note is gone
Other Bankruptcy Courts states did not accept the concept of ride through and the debtor was required to sign a reaffirmation agreement or lost the car. Ohio was one of these states.
The law changed and many people thought the ride through issue was no longer valid. There appears to be some Judges saying that ride through may still exist. Others lawyers have chosen to refuse to allow their clients to sign the reaffirmation agreement. Some parts of the country reaffirmations are required or you lose your car. In Ohio generally if you do not reaffirm then the creditor will pick up the car. Confusing, you bet.
The idea of reaffirming on a car is one you need to discuss completely with your lawyer before you even sign your bankruptcy papers.
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