Expert: Terry Leeders - 4/8/2009

Question
I filed Chapter 7 in October of 2005 and it was discharged three years ago. I had a new auto loan that I signed paperwork for a reaffirmation agreement and have continued to make payments every month since then. All three credit reports are showing that it was included in the bankrupty, none of them show it as an open account that I am paying off. The loan company says they never got the paperwork back from my attorney, and my attorney's office has no answers because they no longer have my files. For three years I have had no one alert me that the paperwork was never completed. So, I have been relying on this to reestablish credit for nothing. I am now upside down in the car loan, still in debt $5400 for a car that blue books at $2800. If I surrender the car now, will it then show up as being repossessed and hurt my credit even further? If so, how can I get it reported so that I show the three and a half years of payments I have been making on this loan?

Answer
If there was no reaffirmation, then the debt will be discharged in the case if you chose to surrender the vehicle and walk away.  Each company reports differently to the credit bureaus, so you may need to contact the credit bureaus later to make sure the debt is being reported correctly. Unfortunately, you won't be able to get 'credit' for the payments because you did not officially reaffirm the debt.