Bankruptcy

Do Not Reaffirm Your Car In Massachusetts If Current

By L. Jed Berliner, Springfield & Marlborough, MA Ban

You may get a letter from your car lender, forcefully stating that you must reaffirm your car loan under the Bankruptcy Code.  This simply is not true in Massachusetts.

Massachusetts law says that a car cannot be repossessed if you are current on your payments, including insurance.  Bankruptcy law says that there is no bankruptcy protection without a timely reaffirmation.   This does not invalidate the separate Massachusetts protections.

Funny that the car lender’s letter didn’t say this.

Well, not so funny.  You’re afraid and uncertain, and didn’t want to file bankruptcy in the first place.  The lender is trying to take advantage of this.  Do not reaffirm.  It’s a one-sided agreement that only helps the lender.  You are free to walk from the car without a reaffirmation, in case you lose a job or get injured or just can’t afford the repairs any more.

I’m Jed Berliner.  I make sure that you’re fully protected when filing bankruptcy.

Full post as published by Bankruptcy Law Network on January 26, 2010 (boomark / email).