topic Re: Can we? New Car loans in Bankruptcy

Can we? New Car loans

princessminor — Fri, 11 May 2018 22:47:13 GMT

Talking with an attorney on Monday and was wondering while our credit score are low (630 somthing using Discover) could we both go for newer cars before we do a 7 or 13? Not sure which one we will end up qualifying for. Would this be illegal? Would they take the cars back once they see we have new car loans? Could we just reaffirm the loans? Also, been using cards to pay utilities and everyday spending. Do we have to have three months of non payment before we can file since using cards? Thanks in advance for all your help.

Re: Can we? New Car loans

Anonymous — Sat, 12 May 2018 15:01:35 GMT

New credit before a Ch7 is generally a no-no. Especially knowingly. If you are able to wait, at all, please wait. There is life after BK including car loans.

https://www.nolo.com/legal-encyclopedia/recent-purchases-cash-advance-bankruptcy.html

Re: Can we? New Car loans

Anonymous — Sat, 12 May 2018 15:09:43 GMT

Also, part of the point of stopping payment on the cards is to save up for the attorney fee, but part of the point is for you to return to paying your bills through cash (your bank account) that way you are no longer charging new debt. It will depend on your income and how much you are being charged by the atty, but generally 3 months is enough time for all of this to work out.

Yes, you will have lates. I promise you! It is not the end of the world, esp. if it is your first late ever. I started having (significant) lates 9 months before I was able to file, that's why my scores tanked.

Trust the process. A lot of us have been through it, and it may be a bit harrowing, but you will come through it.

Re: Can we? New Car loans

princessminor — Sat, 12 May 2018 15:42:10 GMT

Thanks capabk for your response. Do you think Lexus would give us the ok when we buy after discharged, and we waited until say next spring. By the grace of God my car just passed inspection because the check engine light comes on when it feels like it. The car is a 01 Lexus and I've never had a days worth of trouble except for now the check engine light. I want to stay with the company and just wanted to know if they would give us a chance with a BK on file. Then if we have to do a 13, would they question why do we need an expensive car? 13 scares me because I don't like the fact that if you wipe you need permission!!

Re: Can we? New Car loans

princessminor — Sat, 12 May 2018 15:46:01 GMT

So do you think the attorney should we go with him tell us to stop paying the bills for the rest of the month. I used some cards last week, and well Mother's day is tomorrow! I don't want them to think I'm trying to commit fraud by still using the cards. If he says stop using them, will we then have to wait three months and then file? Would they not then charge off at that point? Very confusing.

Re: Can we? New Car loans

pipeguy — Sat, 12 May 2018 20:05:56 GMT

While this may sound harsh, I think you are gaming the system as you are actively using your credit cards knowing you are going to declare bankruptcy. You are also looking to purchase a new(er) luxury vehicle "before" you apply for bankruptcy. There is something wrong with this picture and your priorities.

Re: Can we? New Car loans

princessminor — Sat, 12 May 2018 21:47:17 GMT

Hi pipeguy, while I appreciate your opinion, you couldn't be further from the truth. First off, I'm using the cards because I'm paying my cards and therefore there isn't any money left to do the essentials like buy food, pay utilites and the like. I've been doing this for the pass year and a half so this is how we get by. This is how we're able to continue to pay for other bills and continue to pay credit cards (40) on time every month since 1997. Second, pertaining to the car, if you read the original post, I mention that I wasn't sure if this was or wasn't allowed. So let's be clear if I'm asking if this is permissible, how is that gaming the system? I'm asking before I do it! I've had my Lexus for the last 17 years and now it's time for a newer one. I'm not leaving the company because in all the time I've had the car I've not had to pay for major work nor has it given me any major trouble, like my Ford Taurus or my Chrysler Sebring did. My check engine light comes on at random and that's a problem when it's time for inspection. I paid $2000 last year to a mechanic and he didn't do the job properly so it still comes on. Plus other minor problems are ocurring. My priorties are straight, pay all of my cards on time until I'm told not to. Is the picture clearer now?

Re: Can we? New Car loans

Anonymous — Sat, 12 May 2018 23:29:11 GMT

If you can't pay your bills without charging and you are sure that you are going to file, then you should stop paying the credit cards and use that money instead of the cards. If you have a working cars, why are you getting new ones. If I remember correctly, you mentioned both of you possibly getting new cars. I don't know anything other than what you write, but it sounds like you might need to stay with what you have. You also make it seem like you must have a make of car. If your expenses are such that you need to file bankruptcy without a car payment (assuming after 17 years), then you might not want to jump into an expensive car payment.

Re: Can we? New Car loans

princessminor — Sun, 13 May 2018 04:27:11 GMT

Thanks for the reply Em71. I'm gonna talk with the attorney on Monday and should we decide to go with him, I will then do what he says. I'm using some of them, but I'm also paying them. Does that not make a difference? We're about $400 short monthly so if we stop paying what do we do with the extra money? Won't they ask us how much money we have on hand? The attorney may be $3000, we can pay that in one month. Doesn't this thing take about 3 months? This is why we may end up with a 13. The question was since our scores are better now than they will be after bankruptcy, could we get newer, not new cars now. My car works now, but if we have to do chp 13, will they allow money for car repairs if something out of the blue happens, like the check engine light stays on. Can't pass inspection if light is on. This is why I posed this question, my thought was that it would be hardier once the BK shows up on our reports. I'm staying with my car company because like I mentioned it hasn't given me major trouble in the 17 years I've had it. Why would I go with somthing else? Just need some small things fixed, but don't have the money to do that now. If all I'm paying for is utilities, car payments and rent, etc. that's nothing compared with what we're paying monthly just for the cards. Am I expressing my point clearly? Let me know if you understand what I'm trying to say.

Re: Can we? New Car loans

Anonymous — Sun, 13 May 2018 16:21:47 GMT

Any way to buy a used Kia or Hyundai for cash ?

Re: Can we? New Car loans

princessminor — Sun, 13 May 2018 17:35:57 GMT

Thanks your feedback.

Re: Can we? New Car loans

Anonymous — Sun, 13 May 2018 18:50:10 GMT

I think what people are trying to tell you is that there are other good cars out there, that have great reliability ratings (check consumer reports) and go a long way with little maintenance. You are stuck on one car brand that may be good, but unfortunately in your situation, you may have to consider other options. Especially if it means the difference between a 13 and a 7. It is good that you know you are in this for the long haul (ex. wanting to keep a car long term), but you have to consider your whole picture and that includes the effect on the rest of your life if you are forced into a 13, and also how things will look to a trustee. That said, it is your life and your decision what to do.

Re: Can we? New Car loans

Maria80386 — Sun, 13 May 2018 20:25:24 GMT

First, what does the check engine light code mean? Take your car to an Autozone, O'Reily's, or equivalent. They will read the code and tell you what it means. It could be as simple as bad gas cap with a replacement costing $27 plus tax!

Next, common in older threads and at a bk forum, get a reliable car and a roof over your head before filing. Your lawyer can not tell you, but you can ask if it is legal (in my district it is!). Meet with at least three bankruptcy lawyers before retaining one. It took me over a dozen and a few years before finding one not intimidated by all the moving parts of my filing.

You can buy a car for cash off Craig's List, or eBay, or read classified ads. Have a reliable mechanic, not the one rhat charged $2000 to not solve the problem, look the used car over first. My first car cost $100 to purchase, $25 in baking soda to get the dog smell out, and $375 in parts. A little elbow grease and it ran for several months until I accidentally hit a Lexus, my first "kill". I put 10,000+ miles on it. A friend bought a pickup truck for $1000, put another $2000 in parts plus an engine in, and 100,000 miles and six months later it is still going strong. The one time I didn't have a mechanic look over, I got a POS lemon which I had to give back to the bank before filing.

if you are unable to handle maintenance, a new all-maintenance-included car might be the way to go. Get into one before filing or letting the lates pile up. You may be able to sell the Lexus and use the funds for a down payment on the next car.

Ask questions of the lawyers during your free consults. How to I best prepare? What estate planning should I do first? How long after making payments can I file? My last over $100 credit card charge was [insert date], how long should I wait before filing? Do I need to stop using my cards (answer should be yes)? Can I replace my junker car first? Can I file chapter 7?

Make up your own list, and ask the same core questions to each lawyer. If you don't like their answers, check a few more. Report back here with the answers you don't like or are having trouble understanding. Perhaps we can figure out if it is something that can be changed or something you'll need to live with, or if there is another path.

Start working on a spending plan. It's better than a budget as it is not punitive. There a millions of ways to do one. I like YNAB. Others like Ramsey, Motley Fool, and paper and pencil.

Good luck and let us know how it goes.

Re: Can we? New Car loans

princessminor — Fri, 18 May 2018 00:09:09 GMT

To Maria80386 and to others who have responded, first, please forgive my temporary lapse of judgement regarding trying to get a newer car. It simply doesn't make sense if you can't pay your bills. Second, after my husband and I spoke with the lawyer, he said we could only file chp 13 since the money coming in is more than enough for our household size. We also pay for 4 cards for our parents and because we aren't legally obligated to pay them, that wouldn't be included in our monthly budget. We have to pay them back because they allowed us to use them and so no legally but morally obligated. Let me know what you think about this: Since I'm on long term disability, I think I'm gonna just walk away from most my cards. I have 19 and I would like to co 15 of them. We don't have joint bank accounts, nor do we have joint cards. Chp 13 for us would be 5 years and sol for NY is 6 yrs. If I stop paying mine, I can get his paid off in 3 years max. Also, this way we wouldn't be in the negative each month ($400-$600) and have cash on hand. If I co 15, would the other 4 I'm paying close the accounts once PIF or before? Can I rebuild in less than 6 yrs with co's on my account? Do I keep my JCP mastercard since it's the oldest (1997)? If I co on one capital one, will they close the other two? Am I doing the right thing? HELP!!

Re: Can we? New Car loans

Anonymous — Fri, 18 May 2018 12:12:42 GMT

@princessminor wrote:
To Maria80386 and to others who have responded, first, please forgive my temporary lapse of judgement regarding trying to get a newer car. It simply doesn't make sense if you can't pay your bills. Second, after my husband and I spoke with the lawyer, he said we could only file chp 13 since the money coming in is more than enough for our household size. We also pay for 4 cards for our parents and because we aren't legally obligated to pay them, that wouldn't be included in our monthly budget. We have to pay them back because they allowed us to use them and so no legally but morally obligated. Let me know what you think about this: Since I'm on long term disability, I think I'm gonna just walk away from most my cards. I have 19 and I would like to co 15 of them. We don't have joint bank accounts, nor do we have joint cards. Chp 13 for us would be 5 years and sol for NY is 6 yrs. If I stop paying mine, I can get his paid off in 3 years max. Also, this way we wouldn't be in the negative each month ($400-$600) and have cash on hand. If I co 15, would the other 4 I'm paying close the accounts once PIF or before? Can I rebuild in less than 6 yrs with co's on my account? Do I keep my JCP mastercard since it's the oldest (1997)? If I co on one capital one, will they close the other two? Am I doing the right thing? HELP!!

The thing to keep in mind is that if you default without a BK, there is a good chance some lenders are going to sue you. If you go that route you need to squirrel away some $ in savings to be prepared to settle when they come after you. Otherwise your wages might get garnished. It's a big time roll of the dice.

Why so scared of a 13 if that's your only BK option? The payments on a 13 may not amount to anymore than what you'd pay on his debt alone and you'd both be on the road to recovery this way. Your plan would probably not be 100% repayment.

Re: Can we? New Car loans

princessminor — Fri, 18 May 2018 17:35:49 GMT

@Anonymous wrote:
@princessminor wrote:
To Maria80386 and to others who have responded, first, please forgive my temporary lapse of judgement regarding trying to get a newer car. It simply doesn't make sense if you can't pay your bills. Second, after my husband and I spoke with the lawyer, he said we could only file chp 13 since the money coming in is more than enough for our household size. We also pay for 4 cards for our parents and because we aren't legally obligated to pay them, that wouldn't be included in our monthly budget. We have to pay them back because they allowed us to use them and so no legally but morally obligated. Let me know what you think about this: Since I'm on long term disability, I think I'm gonna just walk away from most my cards. I have 19 and I would like to co 15 of them. We don't have joint bank accounts, nor do we have joint cards. Chp 13 for us would be 5 years and sol for NY is 6 yrs. If I stop paying mine, I can get his paid off in 3 years max. Also, this way we wouldn't be in the negative each month ($400-$600) and have cash on hand. If I co 15, would the other 4 I'm paying close the accounts once PIF or before? Can I rebuild in less than 6 yrs with co's on my account? Do I keep my JCP mastercard since it's the oldest (1997)? If I co on one capital one, will they close the other two? Am I doing the right thing? HELP!!
The thing to keep in mind is that if you default without a BK, there is a good chance some lenders are going to sue you. If you go that route you need to squirrel away some $ in savings to be prepared to settle when they come after you. Otherwise your wages might get garnished. It's a big time roll of the dice.

Why so scared of a 13 if that's your only BK option? The payments on a 13 may not amount to anymore than what you'd pay on his debt alone and you'd both be on the road to recovery this way. Your plan would probably not be 100% repayment.

Hi SteelerNYC, yes it seems that chp 13 is the only BK option. According to two seperate lawyers, we have too much coming in for our household size. Then the amount of money he was asking for was crazy. $2,500 plus $385 now, plus any other fees incured. Then $4500 afterwards which would be part of the payment plan. Is this the going rate? My fear is that we won't be able to pay back our parents cards, which we have to! We said he wasn't sure how much the payment plan would be, but with 36 cards, and 3 loans and still have enough for our parents 4 seem unlikely. Is there a way to find out what the budget would be more or less before we file? What about emergencies that would crop up? How do they handle that? What would they leave you with monthly? I don't mind using cash, it's not having the cash to use. Then we have money directly deposited in an xmas, vacation club and savings. Not a lot because we end up dipping in it, but would they stop us from doing that? I have no wages to garnish.

Re: Can we? New Car loans

Anonymous — Fri, 18 May 2018 18:05:08 GMT

I paid about $3k for my CH7 which was high, but it was an issue of getting what I paid for since the $1k attorneys simply turned my case away.

Ch13 does require a lot more work since your lawyer will be involved through the entire repayment period, so the extra $4500 doesn't strike me as crazy, but I can't say for certain.

My parents had a 13 when I was in high school. They really had to watch their budget, but they managed to find $ for extras and emergencies when they came up. Not sure there is a way to know your payment until it's done, unfortunately.

Re: Can we? New Car loans

princessminor — Fri, 18 May 2018 20:15:30 GMT

@Anonymous wrote:
I paid about $3k for my CH7 which was high, but it was an issue of getting what I paid for since the $1k attorneys simply turned my case away.

Ch13 does require a lot more work since your lawyer will be involved through the entire repayment period, so the extra $4500 doesn't strike me as crazy, but I can't say for certain.

My parents had a 13 when I was in high school. They really had to watch their budget, but they managed to find $ for extras and emergencies when they came up. Not sure there is a way to know your payment until it's done, unfortunately.

Ok, so I see what you're talking about regarding the price. I imagine that they would include inspections costs yrly, registration costs every two years. I think it would be up to use to include these things. I think it's just the not knowing how much we would be left with monthly is the scary part. So because it's important for us to pay our parents cards, I'm gonna suggest to my husband that we don't pay the cards for the next six months, use that money to pay off the parents cards and the lawyer and then file in November some time. This way, their debts would be paid in full, and then we can work on our debt. How does this sound to you? Could we have cash on hand for emergencies? I should start paying you for your advice!

Re: Can we? New Car loans

MakingProgress — Fri, 18 May 2018 21:39:39 GMT

@princessminor wrote:
@Anonymous wrote:
I paid about $3k for my CH7 which was high, but it was an issue of getting what I paid for since the $1k attorneys simply turned my case away.

Ch13 does require a lot more work since your lawyer will be involved through the entire repayment period, so the extra $4500 doesn't strike me as crazy, but I can't say for certain.

My parents had a 13 when I was in high school. They really had to watch their budget, but they managed to find $ for extras and emergencies when they came up. Not sure there is a way to know your payment until it's done, unfortunately.
Ok, so I see what you're talking about regarding the price. I imagine that they would include inspections costs yrly, registration costs every two years. I think it would be up to use to include these things. I think it's just the not knowing how much we would be left with monthly is the scary part. So because it's important for us to pay our parents cards, I'm gonna suggest to my husband that we don't pay the cards for the next six months, use that money to pay off the parents cards and the lawyer and then file in November some time. This way, their debts would be paid in full, and then we can work on our debt. How does this sound to you? Could we have cash on hand for emergencies? I should start paying you for your advice!

I wouldn't do it. The trustee is going to want to know where you spent the money since you weren't paying your credit cards. If they found out that you paid your parents cards and not your own it will be not go over well. Technically your parents loaned you the money for what ever you put on thier cards. That means they should be listed as a creditor and included in your bankruptcy. You are not allowed to show favoritisim to certian creditors even if they are your family. It is your parents responsibilty to pay the card and that debt would not be discharged.

Re: Can we? New Car loans

princessminor — Sat, 19 May 2018 00:33:21 GMT

@MakingProgress wrote:
@princessminor wrote:
@Anonymous wrote:
I paid about $3k for my CH7 which was high, but it was an issue of getting what I paid for since the $1k attorneys simply turned my case away.

Ch13 does require a lot more work since your lawyer will be involved through the entire repayment period, so the extra $4500 doesn't strike me as crazy, but I can't say for certain.

My parents had a 13 when I was in high school. They really had to watch their budget, but they managed to find $ for extras and emergencies when they came up. Not sure there is a way to know your payment until it's done, unfortunately.
Ok, so I see what you're talking about regarding the price. I imagine that they would include inspections costs yrly, registration costs every two years. I think it would be up to use to include these things. I think it's just the not knowing how much we would be left with monthly is the scary part. So because it's important for us to pay our parents cards, I'm gonna suggest to my husband that we don't pay the cards for the next six months, use that money to pay off the parents cards and the lawyer and then file in November some time. This way, their debts would be paid in full, and then we can work on our debt. How does this sound to you? Could we have cash on hand for emergencies? I should start paying you for your advice!
I wouldn't do it. The trustee is going to want to know where you spent the money since you weren't paying your credit cards. If they found out that you paid your parents cards and not your own it will be not go over well. Technically your parents loaned you the money for what ever you put on thier cards. That means they should be listed as a creditor and included in your bankruptcy. You are not allowed to show favoritisim to certian creditors even if they are your family. It is your parents responsibilty to pay the card and that debt would not be discharged.

Our parents didn't loan us the money. It was with the understanding that we pay them back. My mother-in-law took out the carecredit card for us to pay with the vet so our cat didn't die. The other three we just need to pay back our share of what we used. They can't pay our debt and they shouldn't have to. This is all just crazy! Will listing them mess up their credit?