It normally has to be approved by the bankruptcy judge as in your best interest, and some judges tend not to approve confirmation agreements. If your payments for your car or truck loans are up to date, you may fear that you may be forced to return your vehicle as soon as you file for bankruptcy. This is unlikely, but you may have to decide that if you need to keep the vehicle, if you sign a confirmation agreement. If you have a loan for your vehicle and the lender is a security holder on the title of your vehicle and you are considering bankruptcy, you need to know if you have confirmation agreements and whether they should sign one or not. A confirmation agreement on your vehicle loan is a document that, if filed in a timely manner in bankruptcy court, excludes this credit from the statutory amortization – the “discharge” – that the bankruptcy grants you for all or most of your debt. All debts will be reduced, with the exception of special debts that the law does not reduce, such as family allowances and current income taxes. You have no choice but to settle these “inserable” debts. But you have a choice if you want to lighten your vehicle loan. There are a few options available if you are not sure if you can also carry your vehicle in the future. The confirmation agreement is intended to allow you to remain responsible for the loan in order to keep your vehicle.

If possible, maintaining your payments without a confirmation agreement is the best way to proceed if your lender allows it. A lawyer from Lefkovitz-Lefkovitz can discuss this matter with you and help you decide how best to proceed. (6) The court approves or not your confirmation agreement. In general, one way or another, as long as you are up to date with the payments and the vehicle is insured, you can keep the vehicle. If the confirmation agreement is not approved, the lender can recover the car if you are in default, but that`s it. If the confirmation agreement is approved, they can also sue you for the remaining balance due after the sale of the car at an auction. (1) Tell the bankruptcy court that you want to confirm the guilt. You do this by selecting the “Confirmation” field of your debt on the official form 108 (letter of intent).

Upsolves free web application helps you prepare this form. Some lenders will allow a borrower to “keep” the vehicle after a bankruptcy. If you are up to date on all your payments, they accept the risk that it is better for you to keep the vehicle, and hope that you will continue to pay that to accept the loss of security when buying back and selling the vehicle. Why do lenders need a confirmation agreement? You do so because they want you to risk a deficit that hangs over your head, which pushes you to pay the loans until the end of the contract. You are concerned that the value of the vehicle will drop faster than the scale, and do not want to lose money if you go at that time and you cannot resell the vehicle for anywhere near the scale. (5) If you do not have a lawyer or your lawyer has not confirmed the confirmation agreement, the Bankruptcy Court will hold a brief hearing to ensure that the confirmation is in your best interest. You have to participate. Confirmation agreements do not benefit debtors. They only benefit secured creditors. Their purpose is to enable secured creditors to recover the unsecured portion of an otherwise guaranteed debt after the withdrawal. If you have a car loan with a balance of $20,000.

B.B and the car in charge of the credit is worth only $12,000, the unsecured portion of the debt is $8,000.