WASHINGTON — CUNA and the North Carolina Credit Union Leaguehave stepped in to help Coastal Federal Credit Union argue beforethe Eastern District Court for North Carolina that members who haveentered into bankruptcy should not be allowed to keep driving carsthey owe the CU on if the bankruptcy court does not approve theirreaffirmation agreements.

The case involves two Coastal FCU members, Landon and DaffneyHardiman, who financed car through Coastal FCU in February 2005 andfiled for Chapter 7 bankruptcy in May 2007. As part of the process,for which they had an attorney, the Hardiman's reaffirmed the debtfor the car, but their attorney failed to sign the affidavit thatthe reaffirmation agreement would not cause them unduehardship.

Because of this lack the bankruptcy court held a hearing andrefused to approve the reaffirmation agreement but continued toallow the Hardimans to use the car, in a provision which used to becalled a “ride through” and which CUNA assistant counsel MikeMcLain contended most courts in the country recognize as disallowedunder the current bankruptcy law.

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