Legal Question in Bankruptcy in Texas

Both of my cars are included in my bankruptcy, even though I tried reaffirming, both banks denied my reaffirmation. My bankruptcy lawyer said that it would be ok and that my cars would not be included, but now my credit report shows a $0 balance on both vehicles. The bankruptcy lawyer told my wife and I that we would not be getting a good credit rating for on time payments of our cars, but never once said they would be charged off. I called one of my banks to see what was going on, and they said "oh yeah we reaffirmed your loan".... I'm in possession of a denial letter sent by my bank (both) saying they weren't going to reaffirm and even if they had in the first place, my bankruptcy discharge was a month before they even sent the denials. I feel there is something majorly illegal about all of this and just need advice on what to do. My lawyer also said that if banks or collections of any kind were still taking place "no matter what" I could get my money back because "technically" I'm paying for two zeroed out cars that weren't reaffirmed. HELP!

Asked on 4/19/13, 3:54 pm

2 Answers from Attorneys

Rustin Polk

You say you want "advice on what to do." Based on your brief description, I'd say my advice is:

-- if you want to keep the cars, just keep driving them, keep making the normal monthly payments for as long as you keep the cars, and if you eventually pay them off then you own them outright at that point;

-- if you don't want the cars, just call the lender to tell them to come pick them up, stop making the payments, and you don't owe the lender any more money (i.e. you are allowed to just walk away).

That's based on my assumption of you NOT having a valid reaffirmation agreement in place.

Now if my assumption is incorrect, and you do in fact have a valid reaffirmation agreement signed and filed/granted by the court, then you are locked in and can't get out of the deal at this point-- you'll owe the money no matter whether you keep the cars or not.

Here's a link that explains why you want your reaffirmation to have failed:

It would be a real shame if you reaffirmed debts that your bankruptcy lawyer worked so hard to get rid of for you. I know you tried to reaffirm them, let's hope you weren't exactly successful with the paperwork and therefore still have some flexibility...

Rustin Polk

Bankruptcy Lawyer in Dallas



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Answered on 4/22/13, 8:50 am

Gary Armstrong Armstrong Kellett Bartholow P.C

I agree with Mr. Polk's answer. You are generally much better off without a reaffirmation agreement, at least as to liability, if the lender will let you drive and pay. Eventually you will have the cars paid off and have title free and clear. In the mean time, though, you are not going to get monthly credit reporting of the payments on the loan. If that is important to you, it may be possible to send a dispute letter to the credit reporting agencies showing proof of your payments and asking the credit reporting agency to update the tradeline to show the on time payments. You could do this once every six months or so.

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Answered on 4/22/13, 10:22 am

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