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Received Proposed Reaffirmation of Debt Agreement. – Randall

“Dear Lewis,

Between wife and I we were 100,000.00 in credit card debt. First called a debt settlement company and thought I would try that. A good friend of mine talked me into seeing a bankrupt attorney which I did. Our case was discharged in 06/2011 (chapter 7).

During the filing process we received a “Proposed Reaffirmation Agreement” from American Honda regarding our 2008 Honda Accord that we purchased just before filing for bankruptcy. We had leased the car for three years and purchased it at the end of three years with a loan from American Honda. We did not reply to the Reaffirmation Agreement and have continued making our payments as if nothing changed. Where do we stand with the vehicle? Can we turn the car in at any time without penalty? Having continued to make payments, does that change the status of our options of what we can do with the vehicle?

Randall”

Dear Randall,

As long as you are 100% certain you never signed the reaffirmation and submitted it to the court, you can turn in the vehicle with no ill effects to your credit report.

You have been in a “retain and pay” situation that fellow bankruptcy attorneys like to recommend, but is sometimes difficult with car lenders.

Just because you continued to pay the car loan did not change the status of your options.

The last thing you should consider though is any buyout at the end of the lease. Since it was a 36 month lease, you should be near the very end. You may find a small chance that buying out the lease could be a good option – meaning you owe less on the buyout than the car is worth… actual equity.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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Lewis Roberts

Florida Consumer Protection Attorney

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