Arizona Bankruptcy Attorney Blog

I've been asked by some Chapter 7 Bankruptcy clients why it's so hard to negotiate with Bank of America.

My guesses in the past have been that it's a little like a brontosaurus; it's so big that if you stomp on it's tail, it notices fifteen minutes later.

But it appears that Bank of America may have bigger problems than your credit card debt, which is why it may have problems directing brain cells to your credit card negotiations.

And that, in turn, is why your offers to Bank of America could be turned down, even if they are profoundly realistic. The Bank just can't pay enough quality attention to figure out that you're offering it a very good deal!

Hence, "bankruptcy clients"!

But wait; there may be other issues affecting Bank of America, as well.

In a well written post called "Bank of America death-watch", Yves Smith suggests that Bank of America is having the same sort of sleepless nights that its borrowers are having.

For the same reason.

Fear of the consequences of insolvency.

Now, I have no way of telling whether Bank of America is insolvent. But apparently, the market is speaking to that issue, and it's being rather loud. And rude. And unpleasant.

Well, I can. But I won't!

Because in virtually all bankruptcy cases in Arizona, there's no reason in the world to reaffirm on an unsecured debt.

"But I owe the money to Mom, my Doctor, my Priest, my Pusher, my Guru, my Chiro....."

Great!

List them on your bankruptcy schedules, as you must.

Then, after you get your bankruptcy discharge, send them money as your conscience requires.

But it's clearly not in your best interests to reaffirm on an unsecured debt, unless it's to Vinnie the Kneecapper. And he'll walk right through that automatic stay and put you in intensive care anyway, so the same rule applies, right?

Is there ever a reason to reaffirm on an unsecured debt?

Maybe.

For instance, if you intentionally and with a sense of humor ran up $25,000 in credit card debt the day before you filed a bankruptcy, and the credit card company filed a Complaint to Determine Dischargeability of Debt, maybe the only way to keep you sort of intact is going to be to stipulate to the reaffirmation of that unsecured debt.

But you wouldn't do that, would you?

I didn't think so.

Reaffirmations are probably the single most confusing area in consumer bankruptcy law; and that's because the best technique for the debtor, if the debtor wants to keep a car that has a lien, is to check the box in your schedules that says you want to reaffirm, sign the reaffirmation agreement, and ship it back to the lender, and then the debtor appears in Court and hopes that the Judge DOES NOT approve the reaffirmation agreement.

Note that if the debtor's attorney signs the reaffirmation agreement, the Bankruptcy Judge will usually approve the reaffirmation without a hearing, and then if the debtor hits a rough patch and can't pay, the finance company will repossess the car and bang the debtor for a deficiency judgment, which will become a judgment lien on their house if they have one, and permit the creditor to garnish their wages when they have them.

And that's why consumer debtor attorneys who like their clients don't sign off on their automobile reaffirmation agreements. 

On the other hand, if the Judge does not approve the reaffirmation agreement, and the debtor subsequently defaults, there will be no deficiency judgment after a repossession.

In general, going through the motions of a reaffirmation agreement which is not approved by the Court gives you a result just like the pre-2005 "ridethrough". Nolo's Bankruptcy & Foreclosure Blog discusses the issues, and so do I in several previous posts.

And most of the Bankruptcy Judges in Arizona tend to simply vacate the reaffirmation hearings, so you can keep the car without being liable if you ultimately lose your job and are unable to make payments. 

And when I realized that was what was going on, I wrote an article about reaffirmations in Arizona that discussed the "unexpected compassion".

Now, being a Bankruptcy Judge gives you vast discretion, and any of the Judges in Arizona can decide to do anything with a reaffirmation agreement that he or she wants to do.

So results may vary.

If you don't care in the slightest whether you'll be subject to a deficiency judgment if you have bad luck in the future, go ahead and tell your lawyer to sign off on the reaffirmation agreement; it'll save you a trip to Court. So you'll gain a little in convenience.

And by saving that trip to the Court, you'll be risking a deficiency judgment in the future.

p.s. I also wrote about this in my other, other, other bankruptcy blog!

p.p.s. Watch this video by experienced Arizona Bankruptcy Judge Eileen Hollowell. Do you get the idea that she likes approving reaffirmation agreements?

p.p.p.s. There is a slightly different approach to pro se  reaffirmations taken by all of the Arizona Bankruptcy Judges. Some vacate, some have forms, some have forms followed by hearings. I'm going to see about scanning the form used by Bankruptcy Judge Curley and Bankruptcy Judge Haines and posting that here, and I am also going to get a transcript of the educational address that is made by Judge Nielsen before he determines whether a reaffirmation is a hardship. In fact, I'll plug the precise discussions of each of the U.S. Bankruptcy Judges prior to reaffirmation hearings here, or on my other, other Arizona Bankruptcy Blog as soon as I get a...Round Tuit!

Well, here's why: a reaffirmation on a car is a very, very bad idea. Even though you need the car.

Example: when I was a baby lawyer, back when dinosaurs roamed the earth, a beautiful girl had a beautiful car and had a beautiful job with her boyfriend, so nothing could possibly go wrong.

She came to me for a bankruptcy, because even then I was a bankruptcy lawyer.

And she asked me to obtain a reaffirmation agreement for her on the very, very expensive car that she could only pay for because of the great job with her boyfriend's business.

Do you see where this is going?

So I got her the reaffirmation on the beautiful very expensive car and then she lost her beautiful job because her boyfriend found a new beautiful girl.

And then she was sued for a very big deficiency after her very expensive car was repossessed.

So then I had to find a way to make the debt go away, because I felt bad.

They call it the practice of law for a reason.

Most of the Bankruptcy Judges display unexpected compassion in connection with automobile reaffirmations. 

 

A smart bankruptcy professor has written a smart article about the inherent conflicts associated with reaffirmations. If you take the time to read it, you will understand why many experienced Arizona Bankruptcy Attorneys like reaffirmations in the same way that we like plutonium in our orange juice.

He asked me to link to that article, and I was delighted to oblige. So here's the link, Gregory!

And below you'll find an abstract of the article, just for flavor:





Gregory M. Duhl
William Mitchell College of Law



American Bankruptcy Law Journal, Vol. 84, No. 4, pp. 101-167, 2010
William Mitchell Legal Studies Research Paper No. 2010-23

Abstract:     
Section 524 of the Bankruptcy Code divides the consumer bankruptcy attorney’s loyalties between the client and the court. On the one hand, the attorney is the gatekeeper for the court in ensuring that whether a debtor enters into a reaffirmation agreement is balanced against one of the primary objectives of the bankruptcy system - to give the debtor a “fresh start.” On the other hand, the attorney has an obligation under the Model Rules of Professional Conduct to pursue the client’s objectives during the bankruptcy representation.

This Article is about the lawyer-client relationship. Ethics scholars have traditionally adopted either a client-autonomy or paternalistic model to analyze the lawyer-client relationship. This Article rejects both and proposes a collaborative model of lawyer-client decision-making. Congress must free bankruptcy lawyers of their ethical conflict, so that lawyers can work in collaboration with their clients to help debtors improve financially post-bankruptcy. Then, the client might be able to be her own gatekeeper, freeing both the courts and attorneys from that responsibility.

Let's talk about reaffirmations for a little while.

Only a little while, though. They make me sad.

See, a reaffirmation is a bankruptcy specific agreement, inside your bankruptcy, that you will repay a debt according to its terms, and re-establishing your personal liability on that debt.

Just so you know, the entire reason you filed your bankruptcy is because you were looking for your bankruptcy discharge here in Arizona, to get rid of your personal liability!

Do you begin to see why I have a problem with reaffirmations? We're doing everything we can to make your personal liability go away in your bankruptcy, and here we are reversing course and making you personally liable again!

Makes no sense, right?

Well, here's a short video about reaffirmations in Arizona:



Turns out that in some very specific situations, after serious discussion, it might make sense for a debtor to sign a reaffirmation agreement. On a car, for instance.

Almost never makes sense with an unsecured debt, of course, unless its in settlement of a Complaint to Determine Discharge.

But I'll discuss that in a forthcoming educational video about bankruptcy law and procedure in Arizona; for now, understand that I don't like 'em, and after you get to know reaffirmations, you won't like 'em much either.

My big preference for any consumer debtor case (business bankruptcy cases are different, of course) is to keep all the exempt stuff, as well as the worthless and overencumbered stuff, and dump all the dischargeable debt.

Most debt gets scraped off in a consumer bankruptcy case in Arizona, of course; and some won't get scraped off, as frequent readers know.

After all, if you don't list a debt in a timely fashion, you probably won't scrape off that debt. So list all your debts! And some debts won't get scraped off anyway, like most tax debts, and most alimony and child support, and most student loans (although there is some pending legislation that could change a little of that).

So maybe you'll wind up signing a reaffirmation agreement agreement in some cases. But not often!

In the good old days, prior to the 2005 Amendments, we could routinely use a simple ride-through instead of a reaffirmation.

Now?

That would be too easy!


.

There is a very nice bankruptcy blog that I will soon include in my blogroll. It's called "The Bankruptcy Case Blog" and it is maintained by the American Bankruptcy Institute, one of the premier bankruptcy organizations in the country. Their seminars, for instance, are among the best presented in the United States.

That blog recently addressed the most confusing and complicated issue in most Chapter 7 cases in Arizona, what happens to my car when I file a bankruptcy? That's about the most convoluted piece of Arizona bankruptcy information.

I have a addressed that happens in my blogpost entitled Unexpected Compassion; the casenote I will be reproducing below discusses that precise issue, and I am reproducing it below footnotes and all, because the issue of cars is so important in Arizona bankruptcy cases.

The 9th Circuit Opinion, In re Dumont, is discussed below in the ABI Bankruptcy Case Blog, which says:

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Putting the Brakes on Ride-Through in the Ninth Circuit

Home » Topics » Chapter 7
Published by timfox on May 10th, 2010 in Chapter 7
By: Robert J. Guidotti
St. John’s Law Student
American Bankruptcy Institute Law Review Staff

Recently, in Dumont v. Ford Motor Credit Company (In re Dumont),[1] the Ninth Circuit reversed the rule established in McClellan Fed. Credit Union v. Parker (In re Parker)[2] by holding that the implied right of ride-through is no longer available to chapter 7 debtors who do not attempt to reaffirm debts on secured personal property. In this case, the debtor-plaintiff, Dumont, entered into a secured loan agreement with the creditor-defendant, Ford, for the purchase of a personal automobile. Three years after entering into the agreement, Dumont filed a petition for chapter 7 relief.[3]

The purchase agreement between Dumont and Ford contained an “ipso facto” clause that stated that Dumont would be in default if she filed for bankruptcy.[4] While ipso facto clauses are valid under state law, section 365(e)(1)(B) nullifies these clauses so long as the secured property is included in the bankruptcy estate.[5] To include secured property in the estate, section 521 requires a debtor to file a statement of intentions with the bankruptcy court.[6]

Dumont timely filed a section 521 statement regarding the automobile and indicated in the statement that she intended to have the contract “ride through” the bankruptcy.[7] In ride-through, the secured property becomes part of the estate such that the debtor’s delinquent prepetition debt on the secured property is discharged, yet the debtor continues to make the remaining payments on the loan pursuant to the terms of the original contract as if the bankruptcy had never occurred.[8] If the debtor stops making payments or otherwise defaults under the agreement, then the creditor may take action under state contract law to reclaim the property but may not bring a deficiency judgment against the debtor.[9]

Ford requested that Dumont reaffirm the agreement instead of riding through the bankruptcy.[10] A debtor reaffirms a debt when she “promises to repay a prepetition debt that would otherwise be discharged at the conclusion of bankruptcy.”[11] Dumont denied Ford’s request because ride-through provided her the ability keep the automobile and still receive a discharge on her prepetition debt.[12] Three months after Dumont received a discharge, Ford repossessed Dumont’s car, without notice, pursuant to the ipso facto clause in the original contract.[13]

Dumont reopened her bankruptcy case and claimed that Ford had no right to enforce the ipso facto clause because it was nullified upon Dumont filing her statement of intentions.[14] Dumont cited In re Parker,[15] where the court allowed ride-through on a secured contract so long as the debtor filed a timely statement of intentions regarding the secured property.[16] In response, Ford argued that In re Parker is no longer good law because of the 2005 amendments to sections 362 and 521.[17]

According to Ford, section 521(a)(2)(c) now subjects the debtor in chapter 7 proceedings to a new requirement under 362(h)(1)(A), which requires every individual chapter 7 debtor not only to file a statement of intentions regarding secured property, but also to indicate the debtor’s intent to either “surrender, redeem, reaffirm, or assume [the] unexpired lease[s]” of property.[18] Failure to indicate such intent as per the specifically enumerated options in 362(h)(1)(A) removes the property from the estate.[19] Ford argued that according to section 521(d), nothing in the Code limits the rights of the creditor to pursue state law contract rights when the property is not part of the estate.[20] Ford claimed that because Dumont failed to indicate her desire to perform one of the specified options listed under 362(h)(1)(A), the automobile was removed from the estate and therefore Ford could pursue its right afforded by the ipso facto clause to terminate the agreement under state law.

The bankruptcy court and the Bankruptcy Appellate Panel agreed with Ford.[21] The Ninth Circuit Court of Appeals affirmed, expressly reversing In re Parker.[22] The Court of Appeals made plain that debtors in chapter 7 proceedings are no longer able to maintain secured property and avoid liability for pre-petition debt when the debtor makes no effort to reaffirm the debt pursuant to the revised sections 362 and 521. Ride-through is no longer an option and so these debtors who would otherwise be in default under state contract law must choose from the options expressly listed under 362(h)(1)(A) if they wish to maintain possession of their secured property in bankruptcy.

[1] 581 F.3d 1104 (9th Cir. 2009).
[2] 139 F.3d 668 (9th Cir. 1998).
[3] In re Dumont, 581 F.3d at 1107.
[4] Id.
[5] 11 U.S.C. § 365(e)(1)(B) (2006) (“Notwithstanding a provision in an executory contract or unexpired lease, or in applicable law, an executory contract or unexpired lease of the debtor may not be terminated or modified, and any right or obligation under such contract or lease may not be terminated or modified, at any time after the commencement of the case solely because of a provision in such contract or lease that is conditioned on . . . the commencement of a case under this title . . . .”).
[6] 11 U.S.C. § 521(a)(2)(A) (“[T]he debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property . . . .”); see In re Dumont, 581 F.3d at 1108.
[7] In re Dumont, 581 F.3d at 1107.
[8] Id. at 1108. (explaining popularity of ride-through being founded upon chapter 7 debtors’ difficulty in securing alternative lines of credit after bankruptcy and creditors’ willingness to discharge past debts in order to secure payment for “underwater” loans while still maintaining contract rights to repossess should debtor default on contract after discharge).
[9] Id.
[10] Id. at 1107.
[11] Black’s Law Dictionary 1291 (8th ed. 2004).
[12] In re Dumont, 581 F.3d at 1108.
[13] Id. at 1107.
[14] Id. at 1108.
[15] 139 F.3d 668 (9th Cir. 1998).
[16] In re Parker, 139 F.3d at 673 (“[T]he only mandatory act is the filing of the statement of intention, which the debtor ’shall’ file.”); see In re Dumont, 581 F.3d at 1113.
[17] See In re Dumont, 581 F.3d at 1112.
[18] In re Dumont, 581 F.3d at 1114 (explaining use of “‘either . . . or’ disjunction has always meant that one of the listed alternatives must be satisfied . . .”); see 11 U.S.C. § 362(h)(1)(A).
[19] § 362(h)(1)(A) (stating failure to indicate one of exhaustive options terminates stay in regards to secured property).
[20] § 521(d) (stating nothing in Bankruptcy Code will limit rights of creditor to pursue contract and state law rights in event debtor fails comply with section 362(h)).
[21] In re Dumont, 581 F.3d at 1109.
[22] Id. at 1119.

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If you find the issue of reaffirmations of vehicles, whether they are cars, trucks, or motorcycles, a difficult, confusing, or complicated bankruptcy issue, don't be unhappy.

The topic is confusing enough that trying to decide how to explain it to potential bankruptcy clients is itself confusing!

I'm going to keep blogging about this issue. My goal is make the reaffirmation of vehicles issue simple enough for ordinary non-lawyers to understand.

We'll see how I do.

I have written before that Bankruptcy Court is one of the few Courts in the United States where the Pity Pitch doesn't work very well.

The reason is obvious. Everybody there has an excellent reason to make a Pity Pitch, and if everybody can make the same sort of argument, that specific argument will mean less to the people at whom it is directed. They develop a resistance when they've heard it all before.

In addition, the system has been re-designed, after the 2005 Amendments (the "BARF" Act), to eliminate the risk that a human might feel or manifest compassion ("my job is only to calculate ____________: after that it goes to Jerry, for action. I have no discretion in deciding a result at all. It's all numbers.").

But they forgot the Judges! And apparently there is compassion left buried there.

I went to a reaffirmation hearing recently for unrepresented debtors. I must have taken a wrong turn, or I was disoriented because of my advanced age. For whatever reason, I was there.

And I got to watch a remarkable demonstration of compassion from a Bankruptcy Judge I won't embarrass by name.

But he heard about thirty motions for reaffirmation on automobiles in bankruptcy cases involving unrepresented debtors, and he vacated all of them.

Here's what I think is going on in the area of automobile reaffirmations in Arizona.

There's a nifty opinion entitled In re Moustafi, Ch. 7 Case No. 4-07-00407-EWH, 2007 Bankr. LEXIS 1925 (Bankr. D. Ariz. June 4, 2007), and in that opinion, the Judge said, more or less, the debtor tried to get a reaffirmation approved. That's good enough. So even though the reaffirmation wasn't approved, the debtor gets to keep the car as long as payments are current.

Are you confused? Well, you certainly should be!

Here's some history that may help.

Prior to the "BARF ACT" 2005 Amendments to the Bankruptcy Code, a debtor in Arizona could keep a car simply by making payments.

But BARF modified section 521(a) of the Code so that Section 521(a) of the Bankruptcy Code merely requires the debtor to "take steps to act on an intention to either retain or surrender."

So IF a debtor wants to keep a car, and IF the debtor files a reaffirmation agreement timely, and IF the Bankruptcy Judge, FOR WHATEVER REASON, vacates or denies the hearing on the reaffirmation agreement, THEN PROBABLY the debtor gets to keep the car IF the debtor stays current, MAYBE.

Got it?

Yeah, I know. Confusing.

Here's another discussion of the cases and the doctrines and the outcomes, which is in a nifty Georgia Bankruptcy Law Blog.

 

Bankruptcy Judge Hollowell sits primarily in Tucson, so she presides over my cases less frequently than some other Arizona Bankruptcy Judges.

But she's always been smart, even before she got the robes.

She also gives a care about debtors moving through her Court, and she's generated a video discussing reaffirmation and redemption which is published on the Arizona Bankruptcy Court Website.

Whether your case is in Phoenix or in Tucson, it's a smart thing to listen to a Bankruptcy Judge who took the time to explain how she looks at reaffirmations.

You will all recall from my prior blog entries on the point that I share her concerns about reaffirming on automobile loans. In fact, I like reaffirmations the same way I like root canals.

If you listen to the entirety of Judge Hollowell's reaffirmation and redemption video, you'll understand why I feel that way. Or read my older posts on the subject; I was traumatized by a client who asked me to help her reaffirm, who subsequently defaulted on the expensive car loan.

That's why they call it the practice of law; you get to learn a lot of ways NOT to do things.


 

There are many reasons I hate reaffirmations a lot.

Here's one of the small ones.

No matter how smart people are, if there's a little extra money in the bank at the end of the month, they don't usually see that as an emergency.

So what about the situation where they know that they want to keep a car in their Chapter 7, and they know they have to stay current on the car, and the automatic deductions have stopped?

And the automatic payments weren't being made, so the debtor just twiddles thumbs because, after all, there's money in the bank, right?

Well, that ultimately turns into an emergency, when the discharge is entered, and the automatic stay relating to property of the debtor evaporates.

Because then, the debtor says "I didn't notice that the automatic payments weren't coming out of the account, but I really intended to say current, like I told you!"

Sadly, the creditor has no particular sense of humor of which the creditor is aware.

So the creditor will either repo the car, or tell the debtor that they are going to repo the car (less frequent, but some vultures have good table manners).

Remember, the entire area of reaffirmations is fraught with peril.

I have a strong bias: a smart debtor will walk away from the car that has negative equity, NOT reaffirm (even if the judge would permit it, and that's dicey), and then buy a BETTER car at an auction after the filing. A smart debtor will also walk away from a car, even if it has a little equity, if he owes ten or twenty thou on it.

And the smart debtor will find an auction or a private party sale.

Where will the debtor find the five thousand or ten thousand to take to the auction?

Well, that's what parents are for, isn't it?

Note: this one has the potential to be a REALLY big problem. Say the debtor actually reaffirms, and doesn't make the payments. Then the creditor repos the car, sells it at the auction where the debtor should have bought his new car, and comes after the debtor with the dreaded deficiency judgment.

Does that sound like a good idea to anybody?

And while we're on the topic, drive safe, everybody. This is almost New Year, and they actually AIM to hit your car on the roads right now!

p.s. before you borrow money from mom, dad, boyfriend, girlfriend, or an alien from the planet Neptune, become an expert on buying used cars. Go to Amazon.com, and get ten books on how to buy a used car, or how to buy a used car at an auction. Read them. Then borrow. Then buy.

I am not an expert on buying used cars. Eventually, my clients will bring me industrial espionage on the best car auctions out there. Until then, you're on your own.

p.p.s. What happens if you buy a lemon at an auction? Hey, I just work here. All the advice in the world will not protect against the reality that it's better to be lucky than smart.

 

We already know that I hate reaffirmations.

They weren't required in the 9th Circuit prior to the passage of the evil 2005 Bankruptcy Amendments.

Now, the option of staying current and retaining isn't a legal option, but it's a practical option in many cases.

I've never had a mortgage company try anything funny as long as a client stayed current.

But automobile financing is different. About half of folks who lend on cars have started demanding reaffirmations, or they want the car back.

My preference is that we let the car companies eat steel; here's your car!

But some clients have only five payments left. For them, reaffirmation on a car is clearly a pretty good decision.

The problem with reaffirmations is that they re-establish personal liability on a car, so if the debtor, post bankruptcy and post reaffirmation, loses a job and can't make car payments, the car is picked up at 3am by Big Lou and The Hook, and the debtor, post discharge, now gets stuck with a BIG deficiency judgment.

So reaffirmations are agreements I hate, and on the other hand, I'm not quite as dumb as I look (that's not, after all, possible). If a client doesn't have a source of dough to buy another car for cash, and if the car isn't totally upside down, I'll help the client through the reaffirmation if the client asks me to do so.

Note: if the amount owed on the car is thirty thousand dollars, and the car is worth five thousand dollars, even if the client really wants to reaffirm on the car, I'm going to have to be convinced.

A lot. Seriously.

Because I want my clients to get the biggest possible bang for the buck out this not-so-much-fun-as-you-think process.

 

Well, no. Yeah. Sortof.

There was a scene in "L.A. Law" on television where Artie's secretary filed a Chapter 13 bankruptcy, and in that scene the actor playing the Chapter 13 bankruptcy trustee made a big show of cutting up her credit cards while he sneered at her and she cried. Before pontificating that she didn't need a car, because she could take the bus!

Mwah-haa-haaa!!

TO READ THE REST OF THIS POST, CLICK HERE!

 

Okay, here's another thought.

If you really want to keep a credit card after bankruptcy, all you have to do is pay the credit card down to zero, wait 91 days until you file the Chapter 7, and there's a small chance that the credit card will continue to work after your filing.

The credit card company, if it were economically rational, should LOVE the idea that you paid them off, and filed a Chapter 7 Bankruptcy, and STILL wanted to charge and get charged interest on that credit card.

Because under Arizona Bankruptcy Law, and all other U.S. Bankruptcy Law (Bankruptcy Law is Federal Law, provided for in the Constitution of the United States of America), it'll be eight years until you qualify for another Chapter 7 to permit you to get the sort of discharge that people want in a bankruptcy.

You used to be able to file a Chapter 20, which was a Chapter 7 followed quickly by a Chapter 13, to take advantage of the Chapter 7 discharge, and then the Chapter 13 Superdischarge.

But that's all in the golden past, because of the 2005 Amendments to the Bankruptcy Code.

Or the other approach, if you want to keep a particular credit card after bankruptcy, is to reaffirm the debt associated with that credit card.

A reaffirmation, oversimplified and distorted (because all simplification distorts; I was a Philosophy Major, remember) is an agreement that takes a particular debt out of the discharge. It makes that debt unaffected by the discharge.

I hate reaffirmations. A lot.

Here's the deal. Twenty-seven years ago, in my third year of law school, after I'd gotten done drafting the Local Rules of Court for the District of Arizona Bankruptcy Court (along with some truly heavy hitter attorneys) in my third year of law school at ASU College of Law, I worked for two U.S. Bankruptcy Judges at the Bankruptcy Court for the District of Arizona in Phoenix, as a judicial bankruptcy law clerk. For the Honorable U.S. Bankruptcy Judge Vincent Maggiore, and then the Chief Bankruptcy Judge for the District of Arizona, the Honorable Hugh Caldwell.

Then I opened a law office about the size of a tabletop at a Denny's if the manager dislikes you, and started my practice and nearly starved for the first three months, because I'd been a teacher, my daddy had been a teacher and his daddy had been a teacher. No clue how to ask for a retainer.

But one of my early clients was a lovely young woman with a luxury car that she loved. "That the debtor loved" is the beginning of many a sad tale.

The car was huge, and so was the debt.

She said please reaffirm the debt, because I so love the car.

I said yes. That's why they call it the practice of law. You have to practice to get it right.

I got it wrong and reaffirmed the debt for my client.

She lost her job a few months after she received her discharge, and she couldn't make her car payments, and Big Lou came out at two in the morning (as Big Lou does) and towed her car away.

The dreaded deficiency judgment on the car was larger than the car.

I was able to fix it, but I had a bigger toolbox prior to the 2005 Amendments to Bankruptcy Law.

So listen my children and you shall hear of the midnight ride of Big Lou to repossess your car. And don't, don't, don't reaffirm the car unless you have a great reason, which is far better than "I love my car".

Now, I'm the tail, and my client is the dog, so if the client is adamant after I tell the story, I'll try to get the reaffirmation done.

But I'd rather get a root canal.

As bankruptcy lawyer The Incredible Hulk would say, "Bankruptcy Discharge good! Reaffirmation bad!"

We're almost done; if a reaffirmation is a bad idea when it's hooked up to an asset like a car, which could almost make sense on a dark night with a tailwind, how could it be a good idea when the debt you want to reaffirm is associated with....no assets?

You get the idea. My dislike of reaffirmations is probably large enough for many posts.