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Auto Lease Approval Days After BK Discharge

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RACENLC
New Visitor

Auto Lease Approval Days After BK Discharge

Hello,

I wanted to share some current information about leasing a new vehicle with fair credit in Jan 2025. In July 2024, we filed Chapter 7 bankruptcy due to business and legal issues, including significant financial losses from stolen money and assets, from the busienss, hence legal issues. Despite our best efforts to fight through it, things became too overwhelming, and we had to file.

Knowing that less than 45 days after discharge, our lease was up and my wife’s $50k SUV had been in an accident (not severe—mostly suspension and steering damage), I worried we wouldn’t be able to get anything decent. Understanding credit, finance, and loans, I did my best to prepare us for success post-bankruptcy. After discharge, my wife’s FICO 8 scores were:

  • Experian (EX): 626
  • Equifax (EQ): 629
  • TransUnion (TU): 590

My scores were slightly lower:

  • EX: 571
  • EQ: 613
  • TU: 577

VantageScores were around 680s for her and 650 for me. I was surprised, but it helped that 65% of our debt was business-related, and we hadn’t filed on much personal debt.

The Situation

When my wife’s SUV was in an accident, the lender told us they didn’t want it back after it was fixed (even before the bankruptcy) due to the accident. The payoff was $29k, but the post-accident value was $25k, I have dealer offers around that number with the carfax accident. They offered us $7,500 for the title, pay as we want, when it's all paid, we get the title which resolved the issue with her vehicle.

For my truck, I was unsure of what to do I had $8K in fee's and the payoff was near mid/front of book, low miles 9.5/10 condition. I have a long-standing relationship with Ford, but the possibility of including the truck in the bankruptcy worried me. However, we received lease approvals, and purchase pre-quals the same next day of discharge despite our scores. My wife’s Auto 8 scores were close to her FICO scores, while mine were slightly lower on TU/EQ and higher on EX. With over 10 years at the same home, 20 years of same job history, and a low debt-to-income (DTI) ratio, we are the ideal borrower, less the scores/BK of course, but in a relatively strong position.

The Lease Approvals

Toyota Financial Services:

  • Vehicle: 2025 Tundra 1794 4x4
  • MSRP: $72,031
  • Negotiated Purchase Price: $63,531 (with $2k incentives) 90% LTV
  • Approval Tier: Tier 3 (working to bump to Tier 2, requested some verification which was provided)
  • Payment: $866/month (estimated $817 if bumped to Tier 2)
  • Money Down: First payment, and maybe fee's, like TTL, approved with $0 down. 

Ford Motor Credit:

  • Vehicle: 2025 F-150 Lariat Hybrid
  • MSRP: $75,480
  • Negotiated Purchase Price: $62,703.21 ($4k incentive) 83% LTV
  • Approval Tier: Tier 2 (likely bump to Tier 1 based on vehicle selection)
  • Payment: $809.73/month
  • Money Down: First payment, and maybe fee's, like TTL, approved with $0 down. 

The Purchase Approvals

All the usual suspects, Cap 1, all the junk lenders, and captive lenders were ok, but in the 10's, financially we'd have to put a ton down to get something new, and even something used would still be high.  TFS 2.99% for 72 mos is for tier 1, I believe we were 5% for 72mos, we lose the $2k cash, will take more down because of more taxes, and the payment is $225+ more, and I will trade or sell within 3-4 years anyway.  For me, leasing is the way to go. 

Takeaways

This is meant to provide insight and encouragement. Yes, I had two hard inquiries less than 30 days after discharge, but at least I knew where I stand, don't have to stress about a vehicle, and know that I am able to lease a new vehicle. Many posts claim you’ll need a 700+ score or 660 or you will face extremely high money factors, a ton town, or need 12 mos or rebuilding after BK, but it really depends on the deal you get, the relationship your dealer has with lender, and again, choosing the right vehicle.

 

If you’re worried about approval, I recommend speaking with someone in the Fleet Department, Sales Manager, or Finance Manager/Director, find either a volume, or awarded dealer (Presidential Award, Triple Crown, etc) also, if you can find out who floors thier vehicles.  If Ford, or Toyota is thier flooring company, they sometimes get a little extra financing love.  Also, EVERY dealer will say "we can do what any other dealership can do, this is 100% UNTRUE, once you're approved any dealer can get the same call, but the original approval, some dealers have more pull than others, don't be fooled. 

 

Be honest and upfront—they can present a solid case if your story lines up and you have a solid file, even with lower scores. In my experience, the most forgiving captive lenders are Ford, Toyota, Honda, Hyundai, Nissan, Chrysler Capital, and GM Financial.

Tips for Leasing (these have helped me, they may not help you)

  • Research trims, residual values, and money factors (Edmunds Lease Forums is a great resource).
  • Choose a trim with the highest residual value and most incentives.
  • Don’t be discouraged by posts claiming it’s impossible. Everyone’s situation is unique, and minimum scores vary (e.g., Toyota’s minimum is 610, but they take the highest of all three scores; Chrysler Capital has a 620 minimum but has started making exceptions).

Be responsible, do your research, and focus on deals that make sense for you, if your income is lower, get look at trims like SR5, XLT, SLE, LT, etc...

 

GOOD LUCK EVERYONE!

 

EDMUNDS LEAS FORUM LINK- https://forums.edmunds.com/discussions/tagged/x/leasing/p1

 

1 REPLY 1
smarzig
New Visitor

Re: Auto Lease Approval Days After BK Discharge

what a surprise!

All 3 780's
All Chp7, Judgements , CO's now legally clean from scores low 600's just using this forum
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