Bankruptcy

[Viper786]

I am asking a question on behalf of a friend again. He has a car that he owns more on than it's worth. He is also having engine issues with that car and it's costing him a lot of money. If he includes that car in the BK Chapter 7 and gets rid of it, would he be able to get an auto loan right after the BK if he cosigns with someone who has excellent credit?

[sewmuchdebt]

car dealerships get lists of people who have filed fo bk. once your friend files, they will be filling up his mailbox to buy another car. i also have a friend who was referred to a particular dealer for a new auto loan since she included hers in bk. (last month) your friend probably won't need a cosigner. i on the other hand chose not to get another auto loan after my bk. i did however take out a small personal loan to pay cash for a vehicle.this was only after my vehicle (paid for) was stolen. hope that info helps.

[Viper786]

Thanks for the info, how likely would he be to be able to get a loan a few days after his discharge on a loan through lets say Ford without a cosigner?

[rinkgirl2]

My husband and I had a Chapter 7 BK discharged in July 2010 and were able to purchase a vehicle from Carmax using Wells Fargo Dealer Services in August 2010.  I think our interest rate was around 13%.  Then in January 2011 my car was totalled and we purchased another vehicle from Carmax using Santander Consumer at 13.5% and refied in January 2012 with Capital One for 9%.  I think it's definitely possible.  We had the best luck at Carmax.  Other dealers wanted to restrict us on which vehicles we could purchase and one wanted us in some kind of special program that we weren't interested in. 

[StartingOver10]

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Viper786 wrote:

Thanks for the info, how likely would he be to be able to get a loan a few days after his discharge on a loan through lets say Ford without a cosigner?

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I was discharged from Ch 7 BK Jan 2009 and needed a vehicle. Rather than go out and get one with a high interest rate on a large loan, I bought a "decent beater" for $7K. I put down $3500 and financed the rest at a high rate (because I had just been discharged a few days before purchase). The rate was 18% . But I paid it off in 8 months because the actual payment was low. I drove that suv for 2 yrs and traded it in on my current (used) much nicer, newer vehicle in Jan 2011. My interest rate is 7.14% which is much better than what you can get straight out of BK. I had to pay my dues for having the BK, but who wants to pay a high rate on a large amount for a long time?

My point is: once you have come through a BK, don't be eager to borrow large sums on a vehicle at a high rate. Re-establish yourself with smaller sums first. After all, when you are re-establishing your credit there is no additional benefit given to you by FICO to having a high payment.  It's the consistency and timeliness of payments that count, not the size of the payment.  This is where patience can do a world of good when you (or your friend) are post- BK

[jetsfan2012]

It is defintely possible to get financing post BK. I was approved via Cap1 Blank Check program for 12% 4 months after discharge.

[Ace1981]

What was your folk's fico scores for those of you who were able to get a loan? I'm in a similar situation and need a car. My Fico score is 683. My discharge was in May of 2012. I know for some major dealerships like Honda and others, a 683 will get you their promotional rate(0-2.9%). Do big dealerships turn you down just because of the bankruptcy?

[LALALISA]

I filed BK7 in 8/2006, discharged 12/2006. Bought a new truck June of 2007 (12 more payments left!!). I got an astronomically high interest rate through Capital One Auto. From what I understand, it's a lot easier going now to obtain a car loan than it was when I did. I do not know what my score was at the time. I know it was awful but luckily, I also had two paid off car loans on my CR's already with no lates. Getting my truck helped me keep re-establish credit along with getting 3 CC's.

[jetsfan2012]

Things have seemed to loosen up now compared to a few years ago.