Firth Third Bank – will they repo?

A bank does not want to have to repossess a car - especially if they are likely to resell it for less than the loan balance. As long as the account is current and payments are being made timely, the bank will not likely repo the car.

Although it is their corporate policy to obtain the reaffirmation agreement -- they may call and threaten you, or they may call your son and threaten him. More than likely they will not actually repo it, unless the account becomes delinquent. Your son should know that, without a reaffirmation in place, he will be a more likely target if he is ever late with the payments.

Thanks for the reply debtcruncher??? I thought it was odd, but Fifth Third Bank was the only creditor to file a ???Request for Service of Notices??? when I checked my Pacer account???atty said that is customary for that bank to do that and it has/had nothing to do with the hardship???I kind of feel they are looking more closely at it and just waiting for the opportunity to repo it???then again this whole bk process has been quite stressing and I seem to be looking at the glass half full for most of it???I do have another question about the repo???what happens if say, two years down the road when the car is not upside down any longer and it then would be to their advantage to repo, might they consider it then, keeping in mind that the payments are still current???oh not sure if it makes a difference, but this is Illinois, northern district...thanks again

As for the Request for Notices.... it's possible that in your bankruptcy paperwork you listed a particular address for 5/3 (maybe a branch location, or payment address from a payment coupon), but 5/3 has a central bankruptcy department that they want all BK notices mailed to. So that request may just be 5/3 informing the bankruptcy court where notices should be mailed to, instead of whichever address you provided.

Now, in Illinois, at any time an account is in "default" a lender may repossess the collateral. So what constitutes a default? Well, depending on the language in your retail installment contract, your act of filing a bankrupty may constitute a default. (Many banks/lenders in Illinois use Illiana contracts [Illiana Financial just happens to be a popular forms printer, and their forms are approved by the Illinois Bankers Association]. I know that Illiana contracts do specify that any bankruptcy proceeding constitutes a default.) If your contract has specified that a bankruptcy constitutes a default, then technically even if payments are made on time, they can repossess the collateral at any time they want.

So as you suggest, it would be legal for them to wait 2 years and then repo when there is more equity in the car.

That brings us back to the initial question of, will they? While it's entirely possible, again I doubt they will if the account is always current. Just speaking from experience, I run a finance company in IL, and I wouldn't repo as long as the payments are being made. I've had many accounts go BK and never reaffirm, but they still make the payments -- that's all I care about is getting paid. Reality is that repossessing adds complications: we cannot always be assured that the car will resell for the loan balance. The car is constantly depreciating, so if it has negative equity now, even as you continue to make payments, the car will still lose value (or it might have damage/scratches/need repairs/etc that make it worth less). Two years from now, it still may resell for less than the loan balance. That's why I wouldn't entertain the idea of a repossession while the customer is still paying. Now granted, I make the calls and that's my collection philosphy. 5/3 Bank may have different policies, and it may be their policy to repossess if no reaffirmation is received.

If you are worried about it, you might try to refinance. A) If your son has decent credit and income, he may be able to refinance with a different lender in his own name - which will remove you from the picture entirely. B) After your BK is discharged, you are free to incur new debt. You might tell 5/3 that your BK attorney won't approve the reaffirmation, and ask them to re-write/refinance the contract after your discharge. If you both sign a new contract, then that new account isn't part of your bankruptcy, and has the same effect as if you reaffirmed this loan. I've done that before. C) Or if 5/3 won't do that, and your son still can't get a loan on his own, you could both try to refinance through a different lender. A new lender might up the interest rate a little because of your BK, or they might require you to put $1k or 2 into the equity so it's not so upside down when they give you a loan -- but it's not unheard of to do this or be approved for it.

Thanks for the replies, I do appreciate them???I have a few weeks to decide what to do and will think long and hard about it???thanks again.