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  1. #1
    hchhon Guest

    Judge refused Affirmation Agreement of car

    What is the name of your state? MA

    Hi,
    I received this letter from the Trustee:
    ORDER TO SHOW CAUSE
    Upon consideration of 1)Schedules I and J filed by the above-captioned Debtor(s), which schedule show monthly income of 1,483.32 and monthly expenses of $3,073.00, including monthly payments to American Honda Finance Corp.("Honda") in the sum of 539.87 per month; 2) the Reaffirmation Agreement (the "Aggreement") between Debtor(s) and Honda filed on December 24, 2003; (3) the Declaration of Attorney (the "Declaration") in which counsel to the Debtor(s) represents (a) that the Agreement represents a fully informed and voluntary agreement by the Debtor(s), (b) that the Agreement does not impose an undue hardship on the Debtor(s) or a dependent of the Debtor(s), and (c) that counsel has adviced the Debtor(s) of the legal effect and consequences of the Agreement and any default under the Agreement;and (4)the holdings in In re Hovestadt, 193 B.R.382(Bankr.D.Mass.1996) and In re Iappini,192 B.R.8(Bankr.D.Mass.1995), the Court hereby order the Debtor(s) and counel 1) to show cause, in writing, within 10 days of the date of this orders, why counsel's Declaration should not be striken and why this Court should not find the following: a) the Agreement is likely to impose and undue hardship on the Debtor(s) or a dependent of the Debtor(s), and b) the Agreement is not in the best interest of the Debtor(s), see 11 U.S.C. 524(c); and 2) to apppear on Feburary 9, 2004 at 10:00 AM in Courtroom 1, 11th floor, Thomas P. O'Neill Federal Office Building. The Court shall consider the filling of an amended reaffirmation agreement in conformance with the MLBR Official Local Form 6 a satisfactory response to this order. Upon consideration of the the written response, the Court, in its discretion, may cancel the hearing and approve the reaffirmation agreement without a hearing or further notice in the conformance with MLBR 9013-1(f)

    What is all this about? I had my 341 meeting and on 11/18/03 and filed Reaffirmation Agreement on 12/10/03 today (1/07/04) received that letter. Am I in trouble?? Can someone tell me is this a normal procedure? Please help. Now I am worry.

    Thanks!!
  2. #2
    Ladynred is offline Senior Member
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    Doubtful you're in any trouble. Reaffirmations in most states must be approved by the bankruptcy court. If the reaff would harm your 'fresh start', then the court can and will deny the reaffirmation. This is what is happening in your case, the court says that reaffirming is not in your best interests.

    Judging from the income of only $1300+ and expenses of almost 3 times your income, the judge obviously thinks that there's no way you can keep up a nearly $600 a month car payment on a reaffirmation. If you reaffirm and then default, you're on the hook for the debt plus deficiencies should the car be repo'd. This is 'not in your best interest'. Unless you can prove that its not going to cause a hardship, the reaff is denied. You can keep the car by keeping up the payments, but if you default you're protected from any liability, therefore preserving your 'fresh start'.
  3. #3
    hchhon Guest
    LadyRed,
    So what is my option? What should I do now? Just ingnore the court hearing or do I need to go to this hearing? If I agree with the court what should I do next?
    And thanks for a reply.
  4. #4
    Ladynred is offline Senior Member
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    Ask your lawyer if you need to be there. If it were me, I'd certainly go. At the very least, you may be asked to explain how the payment is not a hardship. Do you really *need* to reaffirm this loan ?? If not required, I sure as heck wouldn't - but that's me
  5. #5
    hchhon Guest
    Ladynred,
    I reason I reaffirmed because I told my Lawyer that I want to keep the car and she told me that I have to reaffirm it. Now I realized that you can still keep the car without reaffirming it as long as your payment is current and keep making payment.
    This is what I want to do just keep making payment and keep driving the car without has to reaffirming it. My payment is current.
    Do I need to talk to Honda Fianance and told them that the Trustee did not approve the Reaffirmation Agreement and told them that I want keep making payment and keep the car?

    So if I don't want to reaffirm than I don't have to go to the hearing?

    Thanks
  6. #6
    Ladynred is offline Senior Member
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    In some states, a 'walkthrough" is not allowed - that means you HAVE to reaffirm. I'd have to look up whether MA requires a reaff. If it does not, then all you do is keep making payments. You should contact Honda to get the address for sending payments as most have separate payment addresses for accounts in bankruptcy. They can't send you any bills, so you will have to make sure you payment gets to the right place and on time.

    If MA requires reaffirmations, then you've got a problem. Ask your lawyer if it is REQUIRED and go from there.
  7. #7
    Ladynred is offline Senior Member
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    found something

    Ok, I found the following in the MA BK Court web site. ITs a reaff agreement and it clearly states you do NOT have to do this:

    "***You are not required to enter into this agreement by any law.*** It is not required by the Bankruptcy Code, by any other law, or by any contract (except another reaffirmation agreement made in accordance with Bankruptcy Code ' 524(c)).

    You are allowed to pay this debt without signing this agreement. However, if you do not sign this agreement and are later unwilling or unable to pay the full amount, the creditor will not be able to collect it from you. The creditor also will not be allowed to take your property to pay the debt unless the creditor has a lien on that property. "

    So, looks like you're off the hook Honda should be notified by the BK court that the reaff has been denied.
  8. #8
    hchhon Guest
    "If MA requires reaffirmations, then you've got a problem. Ask your lawyer if it is REQUIRED and go from there."

    And what kind of a problem would that be? Is there a possibilty that they will dismiss my C7 case? If after the reaffirmation agreement hearing the Trustee does not approve it will my C7 case be discharged or dismissed.

    Thanks
  9. #9
    Ladynred is offline Senior Member
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    Well, since the reaff is not legally required, there's no issue, and you'll be fine.

    FWIW, *IF* it was required for you to keep the car, and the court denied it, you'd either have to pay the full balance due on the car or you'd lose it. Your case would not be dismissed, you'd get your discharge, you just wouldn't have the car (if you couldn't pay it off).
  10. #10
    hchhon Guest
    I forgot to add one more bit of information. My son co-signed when bought this car. Can my son take over the payment if the Trustee does not approved it?

    Thank you so much!!
  11. #11
    Ladynred is offline Senior Member
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    As I posted, you are not REQUIRED to have a reaff agreement.

    Sure, your son could take over the payments, but then you defeat the expense on your schedules.
  12. #12
    hchhon Guest
    Ladynred,
    I copied and pasted this Report from my
    PACER account. Can you tell me what is goin here? Am I being discharge very soon?

    This is report copied and pasted from my Docket Report on my PACER account:

    12/22/2003
    Trustee's Report of No Distribution: The trustee reports that he/she has neither received any property nor paid any money on account of this estate except exempt property; that he/she has made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property of the estate; and that there is no property available for distribution from the estate over and above the exempted by law. Pursuant to FRBP 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. The trustee requests that this report be approved, and that he/she be discharged from any further duties as trustee herein. I hereby certify that on this date, the original of this report was filed with the Bankruptcy Court and that a copy was transmitted to the United States Trustee and served upon the debtor(s)' counsel or debtor(s) if pro se. (kmp, ) (Entered: 12/23/2003)


    12/24/2003
    Reaffirmation Agreement Between Debtor and American Honda Finance Corporation Re: 2002 Acura TL With Attorney Declaration. Filed by Debtor xxxxxxx.(chy, usbc) (Entered: 12/24/2003)


    12/30/2003
    Order dated 12/30/2003 to Show Cause RE: 6 Reaffirmation Agreement Between Debtor and American Honda Finance Corporation Re: 2002 Acura TL With Attorney Declaration. Filed by Debtor xxxxxxxx. Show Cause hearing to be held on 2/9/2004 at 10:00 AM at Boston Courtroom 1 - JNF. (chy, usbc) (Entered: 01/07/2004)


    01/08/2004
    Trustee's Report of No Distribution: The trustee reports that he/she has neither received any property nor paid any money on account of this estate except exempt property; that he/she has made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property of the estate; and that there is no property available for distribution from the estate over and above the exempted by law. Pursuant to FRBP 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. The trustee requests that this report be approved, and that he/she be discharged from any further duties as trustee herein. I hereby certify that on this date, the original of this report was filed with the Bankruptcy Court and that a copy was transmitted to the United States Trustee and served upon the debtor(s)' counsel or debtor(s) if pro se. (ph, ) (Entered: 01/08/2004)
    Last edited by hchhon; 01-08-2004 at 08:41 PM.
  13. #13
    Ladynred is offline Senior Member
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    The Trustee is just filing his/her report that there's nothing more for him/her to do, the case is fully administered and notifying the court there's no property to be sold or assets available to be distributed to creditors.

    Based on your 341 meeting, your discharge should have come about mid-January. The hearing on the reaff could hold that up, but then again, it may not. Even after your discharge, it can take some time for the Trustee to actually close your case.
  14. #14
    hchhon Guest
    Ladynred,
    Thank you so much for your clearification! In short shouldn't or should I be worry?

    Thanks again!
    hchhon
  15. #15
    Ladynred is offline Senior Member
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    I don't think you have a thing to worry about. Just make sure you get the proper address for sending in your payments.

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