RSSDebtors could retain collateral securing creditor’s claim pursuant to so-called “fourth option.”
Jul 06
The so-called “fourth option,” under which a debtor may retain collateral securing a creditor’s claim without redeeming it and without reaffirming the underlying debt, simply by continuing to make his or her regular monthly payments thereon, was not eliminated, at least not completely eliminated, by amendments enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This “fourth option” could be utilized by Chapter 7 debtors who had attempted to reaffirm their debt to a motor vehicle lender, and who had entered into a reaffirmation agreement with the lender prior to the expiration of the 45-day period specified in these amendments, but whose agreement was not approved by the bankruptcy dallas court as constituting an undue hardship on the debtors. As long as the debtors remained current in their payments, the lender could not repossess the vehicle post bankruptcy.
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