## Facts

- The debtor filed a Chapter 7 case and owned a 1993 Ford Explorer subject to a lien held by Super Cars, Inc.
- The debtor filed a statement of intention indicating she would reaffirm the vehicle debt.
- The debtor signed and filed a reaffirmation agreement for approximately $4,822.69 at 18.9% APR.
- Debtor’s counsel did not sign the attorney-certification portion of the reaffirmation form.
- Because the attorney certification was absent, the debtor sought court approval of the reaffirmation agreement.
- Based on the debtor’s financial information and the terms of the reaffirmation, the court found the debtor had little or no budget margin to support the reaffirmed obligation.

## Issues

1. Whether a reaffirmation agreement for a secured vehicle debt may be approved when debtor’s counsel does not provide the statutory attorney certification.
2. Whether the proposed reaffirmation was in the debtor’s best interest and did not impose an undue hardship under 11 U.S.C. § 524(c)(6).

## Decision

- The court denied the debtor’s request to approve the reaffirmation agreement.
- The court held that post-2005 amendments limiting retention options for secured personal property did not require approval of a reaffirmation that failed the § 524(c)(6) standards.
- The court concluded the agreement was not in the debtor’s best interest and would likely impose an undue hardship given the high interest rate, the age of the vehicle, and the debtor’s constrained budget.
- The court treated the lack of attorney certification as requiring independent judicial review rather than ministerial approval.

## Legal Principles

- When the attorney certification required by 11 U.S.C. § 524(c)(3) is not provided, the reaffirmation is enforceable only if the court approves it under § 524(c)(6).
- Court approval under § 524(c)(6) requires a finding that the reaffirmation does not impose an undue hardship on the debtor or a dependent and is in the debtor’s best interest.
- Statutory pressure on Chapter 7 debtors to choose among reaffirmation, redemption, or surrender for secured personal property does not displace the court’s duty to deny reaffirmations that fail the § 524(c)(6) standards.
- In evaluating best interest and undue hardship, the court may consider the debtor’s budget capacity, the cost of the reaffirmed debt (including interest rate), and the economic risk of reaffirming debt secured by an aging, depreciating vehicle.

## Conclusion

The court refused to approve an uncertified reaffirmation of a high-interest vehicle debt because the debtor’s finances and the collateral’s characteristics made the agreement inconsistent with the statutory requirements that it be in the debtor’s best interest and not create undue hardship.


In re Riggs, No. 06-60346, 2006 WL 2990218 (Bankr. W.D. Mo. Oct. 12, 2006)