Following receipt of an Reaffirmation Agreement from World Omni, the Macys completed and signed the statutorily prescribed form and both returned the documents to World Omni and filed a copy with the bankruptcy court.
The bankruptcy court sua sponte held that the filing of the Reaffirmation “absent a signature of an authorized representative” of World Omni was improper and of no binding effect, despite that it may be necessary for a debtor to establish that the requirements of 11 U.S.C. § 521(a)(2) were met, since only partially executed “creates uncertainty with the vital and powerful discharge injuction….” The court did allow, however, that debtor’s counsel can file a certificate of service reflecting compliance with the requirements of 11 U.S.C. § 521.
This is a step towards clarifying how debtors and their attorneys in the Middle District can both comply with the requirements of 11 U.S.C. § 521 and also move towards the “ride through” option that was revivified in Coastal Federal Credit Union v. Hardiman, 398 B.R. 161 (E.D.N.C. 2008), but in which the route is much clearer in the Eastern District.
Of course, these reaffirmation opinions still seem to make the false assumption that debtors are the one that want a reaffirmation and will try to trick creditors into such. In fact, debtors just want their cars and generally do not care one whit about the reaffirmation and resulting personal liability, especially since in North Carolina, with its lack of wage garnishment, there is no real means of enforcing and collecting a judgment. Even more, if a debtor falls delinquent on car payments following a Chapter 7, he or she is very likely to file Chapter 13 to keep the vehicle (and thus their job).
Instead it is car creditors, desirous of uniform nation standards that do not require differentiation between states, that want reaffirmations. Appropriately shifting the some of the onus for these reaffirmations to the creditor would increase the efficiency of the process.
For a copy of the opinion, please see: