topic Re: Bankruptcy Friendly Auto Loans Guide in Bankruptcy

Bankruptcy Friendly Auto Loans Guide

nykos5000 — Thu, 20 Sep 2018 18:02:51 GMT

I wanted to cover post DC auto loans as Scupra has done with BK friendly CC due to the large amount of people requesting on rather they should or should not reaffirm an exisiting auto loan due to high payments, etc. As well, for those whose current car is on its last legs and that just happens to coincide with an ongoing BK. Please feel free to add or comment as my comments are based on my search for myself as well some close friends when shopping for a car post BK.

Prime Lenders

-GM Financial Can be post BK friendly depending on credit profile pre BK. Usually is easier with new cars versus used cars due to LTV ratios having to be well below 100%. Good finance manager can push through loan if the deal is right. One year post D/C is usually a solid auto approval with a decent rebuild.

-Toyota Financial Services/Lexus Are very post BK friendly with some people getting approved fresh out of BK. Previous history with Toyota helps quite a bit with some getting tiers bumped due to previous on time payment history with Toyota Finance. Surprisingly, Lexus finance follows the same underwritting rules as Toyota so they too are very leninent post BK. (UPDATE) Have been hearing Toyota Financial has changed their underwritting rules in regards to BK...might be more tough to get in right after discharge...again YMMV.

-Honda Financial Services /Acura Seems to not be as BK friendly as Toyota with heavy emphasis on pre BK auto history even with prior history. I have seen/read ppl on the forums get financed a few months post BK with decent APRs depending on how one builds post BK. Like Lexus, Acura follows the same underwritting rules so can be post BK friendly. Seems to focus on overall build versus just auto build post BK.

-Nissan Motor Acceptance/Infiniti Like Toyota, very Bk friendly with easy financing post BK with the right deal. Infiniti follows the same underwritting rules so I have read ppl leasing Q50's not long after DC.

-Ford Motor Credit BK friendly but wants to see a few months of rebuild post DC. Will not finance you straight out of BK even with prior Ford Motor Credit history. Once you have a few months under your belt, they are very BK friendly with a friend of mine getting 2.3% financing on a brand new Fusion just 4 months post DC. On the flip side, I have heard that if you burn Ford Motor Credit you are blacklisted for life. My client is a succesful business owner who burned FMC back in his 20s and still cannot get back with them even after 20+ years. He had to finance his truck through Cap1.

-VW Credit/Audi Not too BK friendly and would like at least a solid year of rebuilding before will consider. Definitely will consider once a year of payment history has been established (most likely with emphasis on auto rebuild). I have heard various opinions on Audi as Audi may have different underwritting rules. Some have said 5 years post BK is a good number some have said 2 years post BK. I have heard of VW letting someone back in around 2-3 years post BK after burning them with enough down, limiting their exposure.

-Mercedes-Benz Finance Surprisingly not too bad but does require at least one year of auto loan rebuild post DC to consider. Large volume dealers have seen approvals 8-10 months post BK with a solid auto loan rebuild but most times a year post BK with a solid auto loan rebuild is all it takes. Like FMC, I have been told that they blacklist for life if included in BK. MBFS is also big on total credit profile so tier bumps are not uncommon in some very surprising situations.

Subprime Lenders

-Cap1 One of the more popular subprime lenders who are extremely BK friendly. Many get loans the day they are DC for $40k! Although, not the case if they were burned in the BK. This includes solely burning them for CC's. But like with their CC's, they are very forgiving and usually one year post C/O date is enough time to heal those wounds.

-Consumer Portfolio Solutions Specializes in post BK loans but with aweful customer service and high interest rates. They are the Credit One of auto loans. High fees for things like online payments, etc. If your profile cannot get approved with one the prime lenders then CPS may be the only option. There is always the option of refinancing post one year.

-Santander Specializes in subprime loans, although, hit or miss for post BK loans. I could not get a loan with them with 20% down post BK but my buddy got financed with only 10% for a more expensive car with less income a week after DC. Once again, depends on your pre BK auto loan history and the right finance manager who may or may not have relations with certain banks. YMMV

-Prestige Financial Another finance company who specializes in post BK loans with extremely high interest rates (up to 24%) for used cars but mostly will finance anyone with verifiable income. I do believe you have to purchase a car from one of their "approved" dealers.

Ally, Wells Fargo, and PenFed are said to be post BK friendly but I do not have enough experience to comment otherwise. As well, local CU's are a great source if there is a relationship there. Otherwise, a great finance manager always can go the extra mile in approving someone regardless of bank or brand. Always call around ask if there is a BK specialist in the finance department and skip the haggling with the salesman as he or she would have to refer to the finance manger regardless. (Update) Wells Fargo auto approved me a year and half post D/C for a second auto loan with 10% down and an ok-ish interest rate.

Re: Bankruptcy Friendly Auto Loans Guide

luxeprw9 — Tue, 28 Nov 2017 16:41:45 GMT

I received my auto loan from Wells Fargo Dealer Services 4 months post CH13 discharge. My EQ score at the time was 675 and my rate was 4.99. Not the greatest but certainly not the worst! Easy approval - entire purchase process took less than an hour. I bought a used vehicle from a wholesaler and under my budget of $25k. I did not put any money down. It was a lease return and appraised around $29k. I had absolutely no issues with WF but refinanced with my local credit union 5 months later. I want to build a relationship for future mortgage. Rate was basically the same at 4.94. I really would have liked to be under 3% but with the bk, it is what it is. The credit union also gave me a $10k SL Visa.

My BK will be off my reports, with requesting an early exclusion, between March/May 2018.

ETA: My previous auto loan was with Mercedes Benz Financial. But my car had been paid off several years prior to filing BK. This is my first auto loan in 14 years! And it will be my last!!

Re: Bankruptcy Friendly Auto Loans Guide

BamBam2000 — Tue, 28 Nov 2017 20:21:17 GMT

Thank you, Thank you, Thank you. I was looking at Nissan since I still have clean loan history on my Transunion report and did not burn them in my Chapter 13. Just waiting for my discharge now so I can get the title to a car that was included and is now paid for. Scores aren't to far in the toilet at 647/596/608, and I have decent income and now very little debt! I'll stick with Nissan or Toyota. Fingers crossed.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Tue, 28 Nov 2017 20:46:02 GMT

BK Friendly Auto Loan Guide: Buy a car you can pay for with cash.

Re: Bankruptcy Friendly Auto Loans Guide

BamBam2000 — Tue, 28 Nov 2017 20:54:22 GMT

That's what I have now, and it needs an engine and transmission. I'll keep my cash in my pocket this time around and opt for something dependable instead of being broke down between Nashville and Atlanta again.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Tue, 28 Nov 2017 21:15:29 GMT

Sorry to hear. That does happen sometimes.

I just hate to see people rush right back into debt after a BK. For me, I had finally gotten out of it and had no interest in going back. Now I'm socking away close to 40% of my income.

I love cars and have wasted waaaay too much money on them in my lifetime. A $1500 car vetted by a mechanic can get one around. A pretty darn nice car can be had for $5k. Any car has the risk of breaking, unfortunately.

Re: Bankruptcy Friendly Auto Loans Guide

BamBam2000 — Tue, 28 Nov 2017 21:22:09 GMT

I hear you but I think I got it this time. The chapter 13 trained me that way. I won't spend more on a note than I did every month on my trustee payments. I've been missing that money for almot 5 years now anyway so if I'm paying for a car atleast I'll gain an asset.

Re: Bankruptcy Friendly Auto Loans Guide

luxeprw9 — Tue, 28 Nov 2017 22:54:00 GMT

@Anonymous wrote:
Sorry to hear. That does happen sometimes.

I just hate to see people rush right back into debt after a BK. For me, I had finally gotten out of it and had no interest in going back. Now I'm socking away close to 40% of my income.

I love cars and have wasted waaaay too much money on them in my lifetime. A $1500 car vetted by a mechanic can get one around. A pretty darn nice car can be had for $5k. Any car has the risk of breaking, unfortunately.

I am very fortunate that even with my auto loan I am able to save a large portion of my income as well. For last few months, I've been saving 55-60 percent. I am single with no dependents and I work in technology. Quarterly bonuses have really helped beef up my cash position. And I have no credit card debt. Trust me, I've learned a lot during my 5 years of BK! Lessons learned even if it was the hard way.

Re: Bankruptcy Friendly Auto Loans Guide

luxeprw9 — Tue, 28 Nov 2017 22:56:31 GMT

@BamBam2000 wrote:
I hear you but I think I got it this time. The chapter 13 trained me that way. I won't spend more on a note than I did every month on my trustee payments. I've been missing that money for almot 5 years now anyway so if I'm paying for a car atleast I'll gain an asset.

I totally understand what you are saying but a car is not an asset. It is a depreciating liability. Do what's best for your budget and you'll be fine. But remember, assets appreciate!

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Wed, 29 Nov 2017 00:51:26 GMT

What about during a chapter 13? I know it is HIGHLY NOT reccomended but just setting up with plan Z...

Re: Bankruptcy Friendly Auto Loans Guide

BamBam2000 — Wed, 29 Nov 2017 01:13:22 GMT

When I went to the trustee for approval she would only grant me 350per month more and the loan had to be a new car. I never buy brand new so instead I had been saving and paid off my case early. Glad I did because it takes days to get discharged in Illinois the most corrupt backwards state in the union. I want to buy a used car like I did in 2007. You can get a car but have to get approved from your trustee.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Wed, 29 Nov 2017 22:21:46 GMT

Wells Fargo and cap 1 offered me auto loan days after discharge with ficos in 560s. Ally and Ford both denied. Decided to wait a few months and try again for a better interest rate

Re: Bankruptcy Friendly Auto Loans Guide

BamBam2000 — Wed, 29 Nov 2017 22:32:16 GMT

What rate did they offer you. I only have one score thats not 600 yet. Transunion who I haven't been able to get a response from with my disputes.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Thu, 30 Nov 2017 14:09:19 GMT

11% which is why I am waiting a few months. I have absolutely no active accounts showing yet so should get better rate in few months.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Tue, 02 Jan 2018 00:00:29 GMT

@Anonymous wrote:
Wells Fargo and cap 1 offered me auto loan days after discharge with ficos in 560s. Ally and Ford both denied. Decided to wait a few months and try again for a better interest rate

Freshstart, did you apply directly with Wells & Cap1? Also were the reports updated showing the discharge? As of right now the only one showing my discharge is my EX and that score is 589. My TU is 566 and my EQ is 614.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Wed, 03 Jan 2018 16:30:58 GMT

Anyone have any luck with Jeep/Chrysler?
My discharge is Feb 16, and I'm trading my 2004 wrangler in on something new with a warranty.

Re: Bankruptcy Friendly Auto Loans Guide

nykos5000 — Wed, 03 Jan 2018 18:24:10 GMT

@Anonymous wrote:
Anyone have any luck with Jeep/Chrysler?
My discharge is Feb 16, and I'm trading my 2004 wrangler in on something new with a warranty.

Chrysler Capital (Capitve Lender for Fiat-Chrysler) is a subsidiary of Santander so I assume that they follow similar underwritting rules. I have read on BK forums ppl getting loans with Chrysler Capital a few months after a BK but not sure about about immediately. On the flip side, my buddy got financed right out of BK with 10% down with Santander so YMMV. If you do decide to apply, please let us know how things turn out.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Wed, 03 Jan 2018 18:33:40 GMT

Wife wants me to try cap 1, but I burned them for a $800 cc, so I really doubt that they will approve me.
The reason that I wanted to use Chrysler is that they will give a jeep loyalty rebate for trading in my Jeep, or at least that is what a salesman told me recently. I'm kind of skeptical about that because he may be trying to steer me towards Chrysler financing.
From what I have been told by other Jeep owners, the dealerships give the Jeep loyalty rebate, not the finance co, so I'll find out more in six weeks.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Wed, 03 Jan 2018 23:23:25 GMT

DH got financed for $40k just 2 weeks out of BK13 with Cap One at 4.9%. We were able to refi with PenFed just 1 month later at 3.75%.

Cap one pre-approval process was easy @ our purchase was with Car Max and super easy! I think Cap One did a triple pull upon the final approval.

Re: Bankruptcy Friendly Auto Loans Guide

Anonymous — Thu, 04 Jan 2018 01:26:31 GMT

I can't even use the pre-qualify until my discharge is final. I'm pretty sure that if I tried it that it would be instantly rejected, haha.