There is a lot of chatter going on among Nebraska bankruptcy attorneys about reports of court hearings where debtors are being told they can keep a car even if they choose not to reaffirm the car loan as long as payments are kept current.
That’s news to me and many of my colleagues. The Bankruptcy Reform Act of 2005 was supposed to end the Ride-Through option. A “ride-through” is where a lender cannot legally repossess a vehicle even if the debtor does not sign a formal Reaffirmation Agreement as long as the loan was paid current.
A reaffirmation agreement is an agreement to pay a debt (typically a home or auto loan) listed in a bankruptcy case. Reaffirmations basically pull a debt out of the bankruptcy and makes a debtor liable again for the payment. Secured debts tend to be reaffirmed in Chapter 7 and unsecured debts almost never. Clients