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Where can I get a Car Loan DURING Chap. 7 BK?

New Member

Where can I get a Car Loan DURING Chap. 7 BK?

I just filed for Chapter 7 last week.  Between myself and my husband, we've over $60,000 worth of debt (mostly medical) that we'd never be able to pay off, and since our credit scores are already HORRIBLE, it was the best move.  So I have a Dodge Charger that I still owe $10,000 on and it's only worth about $5,000.  I decided that the smartest move is to surrender it - no sense in keeping it and paying twice what it's worth.  Now obviously I need to aquire a vehicle...  I need to find a lender that will finance me DURING a BK.  I know there is lote of sub-prime lenders out there that will do it, I am just trying to find the "best" one.  Advice from someone who's done this would be helpful :-)

Message 1 of 27
26 REPLIES
Valued Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

Prestige Financial.   The interest will be insane, but theyre fair.  Certainly better to deal with than a buy here pay here place.


Starting Score: 11/29/12 TU 527; EQ 565; EX 564 fako - bk7 dc'd 2/15/13
Current Score: 1/22/15 TU 645; EQ 605; EX 633 New goal 675
Cap1 sec $1k (SD) / Fingerhut $2k / Flagship $12k / cashRewards $12k / NavChek $15k / Amazon $2k / Von Maur $1k / Firestone $2.2k / BCU $3k / NFL $1k / QS1 $750 / Target $400 / PPSC $800 / Conoco $700 (last app 09/29/14)
Message 2 of 27
Community Leader
Senior Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?


starry1 wrote:

Prestige Financial.   The interest will be insane, but theyre fair.  Certainly better to deal with than a buy here pay here place.


Sorry for slight thread jack, BUT happy one year post d/c Starry!

Filed BK7: 7/2012 (start score EQ 560 / TU 529) Discharge 10/2012
730 EQ FICO 11/2017
750 TU FICO 11/2017
735 EX FICO 11/2017
$20k NFCU Platinum | $25k NFCU cashRewards Sig | $15k NavChek | $7.1k Cap1 Quicksilver | $10k Amazon Store | $19k Cap1 VentureOne | $16k Barclay Aviator | $5k Chase Freedom | $5k Chase Sapphire Preferred | $9k Costco Visa | $20k AMEX BCE
Message 3 of 27
Valued Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

Starry - any other info on Prestige Financial?  Ever used them personally?

BK Discharge 2/11/14

Currently in the garden.
Message 4 of 27
Established Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

Prestige isn't bad, they have a high interest rate but if you sign up for auto pay and keep insurance on they vehicle they decrease your interest rate 1/2 % every 3 months and it's a simple interest loan.

Message 5 of 27
New Member

Re: Where can I get a Car Loan DURING Chap. 7 BK?

May I ask HOW high interest?  The interest on my current loan (car that I'm surrendering) is 24% due to bad credit, is it THAT high?

Message 6 of 27
Valued Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

I google'd them and read nothing but horror stories - but I guess those were all from people who were unable to make their payments on time - which is not what I want to do.

 

Do they report to all 3 CBs?

 

I'd gladly get on the Automatic Draft with them - wouldn't matter to be as I had that with AHFC but had it stopped since I they are not allowed to do that anymore given I filed for BK.

BK Discharge 2/11/14

Currently in the garden.
Message 7 of 27
Valued Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

Yes, they financed me two weeks after filing. My interest rate was around 19%, can't remember exactly. Their website isn't the greatest, but its good enough. As long as your payments are on time and your insurance is up to date, you will not have any problems with them. After 6 months of payments I refinance d with my credit union though because that interest was killing me.

 

Yes, they report to all three.

 

@scupra. Thanks. I'm excited about it.


Starting Score: 11/29/12 TU 527; EQ 565; EX 564 fako - bk7 dc'd 2/15/13
Current Score: 1/22/15 TU 645; EQ 605; EX 633 New goal 675
Cap1 sec $1k (SD) / Fingerhut $2k / Flagship $12k / cashRewards $12k / NavChek $15k / Amazon $2k / Von Maur $1k / Firestone $2.2k / BCU $3k / NFL $1k / QS1 $750 / Target $400 / PPSC $800 / Conoco $700 (last app 09/29/14)
Message 8 of 27
Senior Contributor

Re: Where can I get a Car Loan DURING Chap. 7 BK?

For what its worth, my first step to recovery was buying a car from a Craigslist listing and getting the person to finance it for me with twelve payments. He did not charge me interest but I paid his asking price for the car which I figured was about $500 above what I wold have paid with cash. The reporting to credit bureaus was not important to me ... I just needed a reliable car to get around. Many of the bad-credit lenders will charge rates above 20% and won't report to credit bureaus anyway. A man's gotta do what a man's gotta do sometimes.

 

Message 9 of 27
Moderator

Re: Where can I get a Car Loan DURING Chap. 7 BK?

Two things:

 

You don't have to get a vehicle while you are in a Ch 7.  There is an automatic stay put on the minute you file BK 7 that the creditor has to go to court to have lifted. So take advantage of your time to have the vehicle while you are actually in the BK. For example, I surrendered one of mine the day after discharge. The creditor didn't even bother to go in to file to lift the stay during the BK period because the entire BK 7 was short. Talk to your attorney. S/he can walk you through the process.

 

Secondly, I did a very similar thing to EZ when buying the vehicle after my discharge. I got a cheap one and paid it off in about 8 months after discharge and drove it for two years before I financed a nice one at a dealership. This way I was able to get my credit above 700 and two years to the date of discharge I got a decent auto loan from Chase.

 

Don't run out and finance a high priced vehicle at a subprime rate during BK. It defeats the whole purpose of the BK!

Message 10 of 27