Reaffirmation of a Discharged Loan

[mcwjjm]

What is the name of your state (only U.S. law)? ohio A loan I was a co-signer was discharged back in 2005. At that time where was some confusion if it was a student or private loan. As it turned out it was private. Years later [last Summer] a debt collector contacted me about repaying the loan. At that time I was under the impression it wasn't discharged and set a up a payment schedule and paid $3100.00 before it came to my attention the loan was in fact private and discharged. This was never taken to court, it was a verbal agreement between myself and the debt collector.

When I learned this I faxed a letter requesting them to stop making withdrawsls from my checking along with my Chapter 7 documents. I heard nothing from them except two weeks later they made the scheduled withdrawal. I closed my account and filed a claim with my bank and was reimbursed. That was in July and I haven't heard from them since. Then last month noticed they placed the debt on my credit report.

My question is my doing so did I in fact reaffirm that loan that was discharged in 2005? My attorney says no. Other attorneys I've spoken with say no, that's it's just a 3rd party that has liking "bought" the loan and now hoping to collect by any means. The question has been raised that regardless if the debt was discharged that I voluntarily "reaffirmed the loan" when I set up a payment schedule and began making payments. I spoke with my attorney and he told me that "a reaffirmation agreement must be filed within 60 days after the meeting of creditors date". Is that true? It's my understanding that when there is no attorney acting on your behalf [as in my case], the Court usually wants to meet with the debtor to make sure the debtor knows that the reaffirmation is completely voluntary. Also if the judge does not believe that a reaffirmation agreement is in a debtor’s best interest and may not have the ability to pay, the judge may refuse to allow the reaffirmation agreement to be entered as a binding agreement. This case was opened in June 2009 and I began making payments in August 2009. There was no reaffirmation agreement filed with the courts, it was an agreement between myself and the debt collector. If they felt they had a winning case wouldn't they have taken me to court by now? Seems like another low ball tactic to me. TIA.

 

[latigo]

Assuming that the debt was unsecured, then it couldn’t have been “reaffirmed” during the bankruptcy proceedings. That process doesn’t apply to an unsecured debt.

But what is peculiar about your post is that after speaking to your “own” lawyer as well as others, you don’t seem to know whether or not you were discharged of the obligation. If the creditor had filed an adversary proceeding to have the debt excepted from discharge, you certainly would have been aware!

If there were no adversarial proceedings or they resulted in being dismissed and you received a general discharge, then the loan was included.

Also if the debt was excepted from the discharge the stay order would have been lifted and it is reasonable to think that the creditor would have shortly filed a civil action to obtain a judgment against you.

__________________________

Here you seem to confuse a judicial sanctioned reaffirmation with a voluntary agreement to repay a debt once discharged in bankruptcy.

And that poses the question of whether or not your subsequent promise to repay the debt is enforceable. To be enforceable the new promise must be supported by adequate consideration.

It seems that the majority of the states recognizing that inasmuch as a discharge in bankruptcy merely bars the creditor from enforcing the obligation, hold that the moral obligation to pay is sufficient consideration.

Apparently you have rallied up a flock of attorneys, so ask them how your state court would look upon the presence or absence of consideration as supporting your post bankruptcy promise.

______________________

Incidentally, the creditor would have no difficulty proving your oral promise. The $3,100 didn't fall from the sky!

 

[mcwjjm]

Assuming that the debt was unsecured, then it couldn’t have been “reaffirmed” during the bankruptcy proceedings. That process doesn’t apply to an unsecured debt.

But what is peculiar about your post is that after speaking to your “own” lawyer as well as others, you don’t seem to know whether or not you were discharged of the obligation. If the creditor had filed an adversary proceeding to have the debt excepted from discharge, you certainly would have been aware!

If there were no adversarial proceedings or they resulted in being dismissed and you received a general discharge, then the loan was included.

Also if the debt was excepted from the discharge the stay order would have been lifted and it is reasonable to think that the creditor would have shortly filed a civil action to obtain a judgment against you.

__________________________

Here you seem to confuse a judicial sanctioned reaffirmation with a voluntary agreement to repay a debt once discharged in bankruptcy.

And that poses the question of whether or not your subsequent promise to repay the debt is enforceable. To be enforceable the new promise must be supported by adequate consideration.

It seems that the majority of the states recognizing that inasmuch as a discharge in bankruptcy merely bars the creditor from enforcing the obligation, hold that the moral obligation to pay is sufficient consideration.

Apparently you have rallied up a flock of attorneys, so ask them how your state court would look upon the presence or absence of consideration as supporting your post bankruptcy promise.

______________________

Incidentally, the creditor would have no difficulty proving your oral promise. The $3,100 didn't fall from the sky!

Thanks latigo. The loan was discharged. At the time that I submitted my Chapter 7 there was some confusion whether if it was a private or government backed loan. I was under the impression it wasn't discharged. That was in October of 2005. They contacted me in the Summer of 2009 about the debt. At that time I assumed I was still on the hook for it and seeing the original borrower had recently attempted suicide and was unable to support herself or our 2 children [they came to live with me] much less pay back a loan so I stepped up and began payments. Then in the Spring of this year I discovered that the loan was a private loan and therefore dischargeable. I confirmed this with all parties involved and contacted the collector with my discovery. I've heard nothing from them since. If they felt there was no question that I was still responsible why haven't they contacted me since July or taken me to court? They certainly weren't bashful about hounding me before either at work or home on a weekly basis. I never contended I didn't agree to set up a payment schedule.