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

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

aLottaGoodEggs — Fri, 07 Feb 2014 16:22:46 GMT

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 :-)

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

starry1 — Fri, 07 Feb 2014 17:04:10 GMT

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

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

Scupra — Fri, 07 Feb 2014 17:14:13 GMT

@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!

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

0REDSOX7 — Fri, 07 Feb 2014 17:40:52 GMT

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

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

Officer737 — Fri, 07 Feb 2014 18:54:53 GMT

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.

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

aLottaGoodEggs — Fri, 07 Feb 2014 19:37:01 GMT

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?

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

0REDSOX7 — Fri, 07 Feb 2014 20:50:17 GMT

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.

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

starry1 — Fri, 07 Feb 2014 22:23:15 GMT

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.

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

ezdriver — Fri, 07 Feb 2014 22:21:35 GMT

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.

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

StartingOver10 — Fri, 07 Feb 2014 22:35:42 GMT

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!

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

Officer737 — Sat, 08 Feb 2014 00:24:50 GMT

Interest rates will vary but high teens is the norm for them (18-20%). All the horror stories I read about them was when people wanted to pay weeks late and stuff from what I read. I am suing them just long enough to refinance at a better rate. But it will show a positive TL after the BK so I can deal with interest till then.

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

0REDSOX7 — Sat, 08 Feb 2014 01:35:29 GMT

Got ya. I'm gonna be in need of two vehicles post BK here in a bit. My wife and I have put firm limits of 17K a piece. We figure at 17% rate each, it would be less than the combined 875 we are paying now a month for two cars with negative equity.

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

Officer737 — Sat, 08 Feb 2014 01:47:45 GMT

Redsox,

I think your hardest problem is going to be getting 2 at once. I know Presitge will only let you have one at first. So may have to use a second company also. If I do plan it right on mine, I will actually have mine paid off in just under 2 years.

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

0REDSOX7 — Sat, 08 Feb 2014 01:51:11 GMT

I'm trying to use capital one auto and Wells Fargo dealer services. My local dealer says they work well with post Bk for them so we shall see.

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

Officer737 — Sat, 08 Feb 2014 02:27:58 GMT

Cap One is a company I am starting to some looks from to refi a vehicle I reaffirmed

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

Anonymous — Sat, 08 Feb 2014 14:17:51 GMT

You'll get in trouble if you do it before the 341 meeting... so DON'T. After the 341 - even the next day, as my husband did - you can. We had good luck going to a small dealer and using Credit Acceptance Corp. Interest rate was high - 21.99% - BUT we planned (and are) making double payments and will soon accelerate that so it's paid off in 16 months instead of 54. The effective interest rate, that way, is low. At this point, it's not even worth it to refinance to a lower rate... it'll be paid off in August.

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

StartingOver10 — Sat, 08 Feb 2014 14:54:49 GMT

You will get a much better rate if you wait until your discharge is in hand.

Keep your existing vehicle until you get your discharge and then get the new one and surrender the old one.

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

Anonymous — Sat, 08 Feb 2014 18:07:59 GMT

The problem with thinking it will be okay until discharge is that the Motion to Lift the stay is easily made and even more easily granted. If you oppose, you do have a bit longer (30 days for the hearing)... but then you have to explain why you thought it would be okay to keep a car you're not paying for. Twice. The response time allowed for answering the motion before a judge is past the date of the 341 (and you don't want to explain yourself for that to the trustee either and make things harder for you; they want to see remorse), so you'll have the ability to finance a vehicle before discharge without alienating the trustee and jeopardizing your discharge. The motion to lift the stay will be approved and you'll be embarrassed and suddenly without a vehicle. It's putting off the inevitable and the lift, unopposed, wouldn't happen until after the 341 meeting anyway.

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

starry1 — Mon, 10 Feb 2014 16:28:04 GMT

@Anonymous wrote:
You'll get in trouble if you do it before the 341 meeting... so DON'T. After the 341 - even the next day, as my husband did - you can. We had good luck going to a small dealer and using Credit Acceptance Corp. Interest rate was high - 21.99% - BUT we planned (and are) making double payments and will soon accelerate that so it's paid off in 16 months instead of 54. The effective interest rate, that way, is low. At this point, it's not even worth it to refinance to a lower rate... it'll be paid off in August.

I didn't. You can do it after filing according to my attorney.

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

StartingOver10 — Tue, 11 Feb 2014 00:08:02 GMT

@Anonymous wrote:
The problem with thinking it will be okay until discharge is that the Motion to Lift the stay is easily made and even more easily granted. If you oppose, you do have a bit longer (30 days for the hearing)... but then you have to explain why you thought it would be okay to keep a car you're not paying for. Twice. The response time allowed for answering the motion before a judge is past the date of the 341 (and you don't want to explain yourself for that to the trustee either and make things harder for you; they want to see remorse), so you'll have the ability to finance a vehicle before discharge without alienating the trustee and jeopardizing your discharge. The motion to lift the stay will be approved and you'll be embarrassed and suddenly without a vehicle. It's putting off the inevitable and the lift, unopposed, wouldn't happen until after the 341 meeting anyway.

I had no issues keeping the car through out my BK. As I said before, the lender didn't even file for the Motion to Lift the stay.

Of course, I was making the payment for this vehicle that I was surrendering (and the one I reaffirmed) during the BK because I couldn't afford to wake up one morning without a vehicle. It was only 3 additional payments from filing to discharge (Filed Sept 30 and Discharged Jan 6th). It was peace of mind for me so I didn't make a poor decision during the BK process.

Each to their own. But it is a difficult way to turn over a new leaf if you are going to jump out and start paying on a high interest newly acquired loan for a vehicle during your BK. It truly defeats the entire purpose of "starting over".