What to do about a reaffirmation agreement for my car loan?

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What to do about a reaffirmation agreement for my car loan?

I have filed for Chapter 7 and have my creditors meeting next week. I just recevied the reaffirmation agreement for the car I’m upside down on. It’s worth $3000; I owe about $17,000. Everyone has told me not to sign it. Will I get in trouble in court next week? Do I need to bring anything to court. I’m a single working parent and I couldn’t file with an attorney because I couldn’t afford to. I’m scared to death of losing my car and not being able to get to work but the car is old and the APR is 25%. The car is not under warranty and if something happens to it and I can’t get to work I can’t afford to fix it, etc.

Asked on April 10, 2012 under Bankruptcy Law, California

Answers:

Madan Ahluwalia / Ahluwalia Law Professional Corporation

Answered 9 years ago | Contributor

You can reaffirm the debt, continuing the same payment terms with the lender, or you can surrender the car and wipe out the debt.  Finally, you can buy the car for Fair market Value, called redemption.  The court will strip off any of the debt above the fair market value.  


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