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Maverick, Attorney
Category: Bankruptcy Law
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Experience:  20 years of professional experience
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I realized (after calling Wachovia yesterday), that I did not

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I realized (after calling Wachovia yesterday), that I did not re-affirm my auto loan with them and therefore am paying the loan with no contract. This means that the bank reposess the care at any time prior to payoff. I owe 15,000 on the 2004 volvo c70. Should I surrender the vehicle or continue paying with no contract. My fear is that Wachovia will wait until most of the payments have been made and then repo the car. I also am wondering if the timely payments I am making will reflect favoribly on my credit. If not then I would rather surrender and use the money to resume college classes. 42 year old female, confused.
J. Gilstrap

Some creditors believe that the new 2005 bankruptcy law requires that a debtor sign a reaffirmation agreement if they want to retain the vehicle. However § 524(c) states that any obligation must be ‘enforceable under applicable non-bankruptcy laws, whether or not such a debt is waived." As a result, if the debtor is current on his payments, keeps his vehicle insured and still refuses to sign a reaffirmation agreement, there appears no default that is enforceable under non-bankruptcy laws.


However, the language of the original car not may contain a clause that says that the filing of BK itself or obtaining a discharge is a default. So the law is a little tricky on this issue and you could end up in a situation where you make the payments and end up with a repo.


Most probably the credit report shows a line entry that the BK was filed on this debt but probably also shows a consistent payment history on it. SO you will want to pull your credit report and see. But right now, without the reaffirmation it is almost like you are renting a car from them. So you may want to get something in writng from them that says that if you continue to make timely payment they will not repo the car and will transfer title upon completion of the payments. If they are not willing to provide that, I would consider surrendering the vehicle.


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