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To Reaffirm Secured Debt on Vehicle or Not
You don't say who the lender is - VW Finance? If so, I have not heard that they are repossessing current loans post-discharge, as Ford and Chrysler are doing. Some lenders will negotiate a lower interest rate and payment (Wells Fargo Finance is very cooperative) and your client may then want to take the risk of a Reaffirmation in exchange for the loan modification. Other lenders won't even consider changing the loan terms. Some clients are desparate to avoid any risk of repossession, some understand the risks and benefits of just continuing to make payments.
As far as signing the certification, I know there is a big split in the CDCBAA on this issue. Some members refuse to sign on all cases believing they may be personally liable to a lender if payments are not made in the future. I personally am not concerned unless I see it happen to an attorney, and will sign the certification if it's what my client wants and I think they can afford the payment and it's in their best interest. This is a discussion we need to have with all our clients with car loans at the time the case is prepared.
James R. Selth
Weintraub & Selth, APC
12424 Wilshire Blvd., Suite 1120
Los Angeles, CA 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
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To: cdcbaa@yahoogroups.com
Sent: 5/01/2008 8:22AM
Subject: [cdcbaa] To Reaffirm Secured Debt on Vehicle or Not
Client filed chap 7 and has a 2007 VW Jetta w/ fmv about $16,825.
The amount of the secured claim is $18,526, leaving an unsecured
portion of $1701. Debtor needs and wants the car, so won't surrender
the car, and can't afford to redeem. I'm curious as to what the
creditor is likely to do if debtor doesn't reaffirm, but just keeps
making the monthly payments? I'd rather not have my client commit to
reaffirmation, and am just wondering if there are alternatives I'm not
aware of. If client wants to reaffirm, am I expected as an advocate
to try to negotiate the debt down (to fmv for example)? Finally, I
would appreciate thoughts on the pros and cons of me certifying the
reaffirmation or not. On the one hand it seems to promote judicial
economy by avoiding a motion, but on the other I am assuming some
liability and taking up my time by doing so. Thanks again in advance
to you helpful listserv participants.
You don't say who the lender is - VW Finance? If so, I have not heard that they are repossessing current loans post-discharge, as Ford and Chrysler are doing. Some lenders will negotiate a lower interest rate and payment (Wells Fargo Finance is very cooperative) and your client may then want to take the risk of a Reaffirmation in exchange for the loan modification. Other lenders won't even consider changing the loan terms. Some clients are desparate to avoid any risk of repossession, some understand the risks and benefits of just continuing to make payments.
As far as signing the certification, I know there is a big split in the CDCBAA on this issue. Some members refuse to sign on all cases believing they may be personally liable to a lender if payments are not made in the future. I personally am not concerned unless I see it happen to an attorney, and will sign the certification if it's what my client wants and I think they can afford the payment and it's in their best interest. This is a discussion we need to have with all our clients with car loans at the time the case is prepared.
James R. Selth
Weintraub & Selth, APC
12424 Wilshire Blvd., Suite 1120
Los Angeles, CA 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY
US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
----- Original Message -----
From: "jeffreycancilla"
To: cdcbaa@yahoogroups.com
Sent: 5/01/2008 8:22AM
Subject: [cdcbaa] To Reaffirm Secured Debt on Vehicle or Not
Client filed chap 7 and has a 2007 VW Jetta w/ fmv about $16,825. The amount of the secured claim is $18,526, leaving an unsecured portion of $1701. Debtor needs and wants the car, so won't surrender the car, and can't afford to redeem. I'm curious as to what the creditor is likely to do if debtor doesn't reaffirm, but just keeps making the monthly payments? I'd rather not have my client commit to reaffirmation, and am just wondering if there are alternatives I'm not aware of. If client wants to reaffirm, am I expected as an advocate to try to negotiate the debt down (to fmv for example)? Finally, I would appreciate thoughts on the pros and cons of me certifying the reaffirmation or not. On the one hand it seems to promote judicial economy by avoiding a motion, but on the other I am assuming some liability and taking up my time by doing so. Thanks again in advance to you helpful listserv participants.
The post was migrated from Yahoo.
Client filed chap 7 and has a 2007 VW Jetta w/ fmv about $16,825.
The amount of the secured claim is $18,526, leaving an unsecured
portion of $1701. Debtor needs and wants the car, so won't surrender
the car, and can't afford to redeem. I'm curious as to what the
creditor is likely to do if debtor doesn't reaffirm, but just keeps
making the monthly payments? I'd rather not have my client commit to
reaffirmation, and am just wondering if there are alternatives I'm not
aware of. If client wants to reaffirm, am I expected as an advocate
to try to negotiate the debt down (to fmv for example)? Finally, I
would appreciate thoughts on the pros and cons of me certifying the
reaffirmation or not. On the one hand it seems to promote judicial
economy by avoiding a motion, but on the other I am assuming some
liability and taking up my time by doing so. Thanks again in advance
to you helpful listserv participants.
The post was migrated from Yahoo.