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.… Read More
Tagged with: reaffirmation
The bankruptcy court issued a show cause order to the Debtor’s attorney for signing a certification that a reaffirmation would not be an undue hardship for the Debtor. The court held that in regards to a reaffirmation the debtor’s attorney must file an Affidavit stating that the Reaffirmation:
1. Represents a fully informed and voluntary agreement by the debtor;
2. Does not impose an undue hardship on the debtor or a dependent of the debtor;
3. That the attorney fully advised the debtor of the legal effect and consequences of the agreement and any default under such an agreement, as well as other options available instead of reaffirmation.… Read More
Sixteen months after filing Chapter 13, the Debtor converted to Chapter 7. Capital One, the lienholder against the Debtor’s vehicle, sent the Debtor a reaffirmation agreement, which would have required immediate and full payment of the $16,149.46 balance. Debtor’s counsel requested Capital One negotiate payment terms, but received no response. No reaffirmation on the original contract terms was offered. Without seeking relief from the automatic stay, Capital One then repossessed the vehicle and the Debtor brought an action for damages and return of the vehicle.
11 U.S.C. § 521(a)(2)(A) requires that, within 30 days after the petition date, the debtor shall file a statement of intention with regard to debts secured by property of the estate indicating whether the debtor will surrender or retain the property, and if retaining property, whether the debtor intends to redeem such property or to reaffirm debts secured by such property.… Read More
Tagged with: reaffirmation
B-Line purchased a charge account that the Debtors originally had with Kay Jewelers, which had been listed as a creditor on Schedule F of the Debtors’ petition, with a balance owing of $860.61. Following the filing of the Debtors’ bankruptcy, B-Line solicited a reaffirmation from the Debtors, including a warning/threat that “If the Jewelry purchased under this secured account have been destroyed, gifted or transferred, or sold, [B-Line] may have a non-dischargeability cause of action against you/your client(s) under 11 U.S.C. § 523.” In response, the Debtors initiated a adversary proceeding against B-Line, alleging that B-Line violated N.C.G.S. § 58-70-1 because it carried on a “collection agency business” without securing a permit through the Commissioner of Insurance before it solicited a reaffirmation agreement.… Read More
Debtor filed a reaffirmation agreement with Ally for a vehicle with the bankruptcy court, despite showing that her monthly income minus monthly expenses resulted in a negative net income, indicating a presumption of undue hardship. The reaffirmation stated that the Debtor intended to adjust her expenses to afford the car payments. The Debtor’s attorney did not complete the certification in the reaffirmation that there was no undue hardship. Due to the absence of the attorney certification, the bankruptcy court set the reaffirmation for hearing. Ally neither filed a proof of claim in the case, appeared at the reaffirmation hearing, nor responded to the eventual motion by the Debtor to declare the reaffirmation unenforceable.… Read More
This article discusses the “fix” that Congress attempted to make in BAPCPA in 11 U.S.C. § 365(p)(2), by allowing Debtors, rather than just the Trustee, to assume leases for personal property, usually vehicles, in Chapter 7 cases.
The author finds that two questions arise from the statutory language, which is yet another example of the shoddy drafting that is a hallmark of BAPCPA. First, whether a debtor can effectively assume a lease under § 365(p)(2) without entering into a reaffirmation under § 524(c) and second, if assumption under § 365(p)(2) can occur without reaffirmation, are the debtor’s obligations under the lease subject to discharge, in effect providing for “ride-through”.… Read More