Car loan

[Kuntry]

Has anyone experienced trying to get an auto loan after Chapter 7 discharge? I was advised by BK attorney to surrender my current upside down car. Also, my fico is 525.....any advice or experience?

[dap1984va]

I can only give you my honest opinion.. "opinion"...I would suggest getting a co-sign if possible.With that current of a BK and the score, it will be very very very very difficult. Especially for a new car, I am sure if you were able to get a car loan the interest rate you pay will double the price of the car and the car salesman will be driving a BMW 550 (fully loaded, leather, sunroof etc)  at your expense

[Anonymous]

Also, if you surrendered the car it will show as a repo (voluntary / involuntary doesn't seem to matter) on your credit report which will kill your auto enhanced scores. I suspect that you're going to find it incredibly difficult to obtain an auto loan especially with out a co-signer.

[StartingOver10]

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@Anonymous wrote:

Also, if you surrendered the car it will show as a repo (voluntary / involuntary doesn't seem to matter) on your credit report which will kill your auto enhanced scores. I suspect that you're going to find it incredibly difficult to obtain an auto loan especially with out a co-signer.

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^^^^No, not true. When you are surrendering a vehicle in your BK, it is marked iib (included in bankruptcy) with a zero balance. The creditor can not notate it as a repo UNLESS it was repo'ed prior to the date the BK was filed.

Auto loans after BK without co-signers are done all the time. I know, because I got one. Check all the other threads. You do have to actually qualify for the loan and have your discharge papers in hand in order to get a decent deal.

[Kuntry]

Thanks guys...my attorney advised me NOT to reaffirm the debt because of the bad terms. Prior to loss of job, 51 on time lease payments to MBenz finance. The new loan obtained when converting from lease. That loan does not appear on my credit report?! But the good payment report from MBenz does. I hope that bodes well for me. Reemployed for two years now and current on mortgage for last 14 months. Chapter 7 discharged Dec 16, waiting for papers. I want to do well with this fresh start, but I need a car; so I will have to accept higher interest etc.

[Anonymous]

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@StartingOver10 wrote:

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@Anonymous wrote:

Also, if you surrendered the car it will show as a repo (voluntary / involuntary doesn't seem to matter) on your credit report which will kill your auto enhanced scores. I suspect that you're going to find it incredibly difficult to obtain an auto loan especially with out a co-signer.

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^^^^No, not true. When you are surrendering a vehicle in your BK, it is marked iib (included in bankruptcy) with a zero balance. The creditor can not notate it as a repo UNLESS it was repo'ed prior to the date the BK was filed.

Auto loans after BK without co-signers are done all the time. I know, because I got one. Check all the other threads. You do have to actually qualify for the loan and have your discharge papers in hand in order to get a decent deal.

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Oh! Good to know!

[RushXTC]

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@Kuntry wrote:
Has anyone experienced trying to get an auto loan after Chapter 7 discharge? I was advised by BK attorney to surrender my current upside down car. Also, my fico is 525.....any advice or experience?

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When was the chapter 7 filed?

This is my sisters approval (taken from a post I made a while back in the approval thread)

So I don't know if you like Honda's, But depending on when it was filed :

APPROVING BANK: Honda Financial
BUREAU PULLED: N/A
CREDIT SCORE: N/A
CUSTOMER STATE OF RESIDENCE: CA
NEW/USED: New
YEAR OF VEHICLE: 2013
MAKE: Honda
MODEL: CRV
MILEAGE: 0
RETAIL/LEASE: Retail
AMOUNT OF LOAN: $26,164
TERM CONTRACTED: 72 Months
APR/LEASE RATE: 6%
MONTHLY PAYMENT: $439
ANNUAL INCOME: $30,000
DEBT TO INCOME RATIO: N/A
MISCELLANEOUS COMMENTARY: This is actually my sisters, She didn't pay attention nor did she get any paper from Honda with her credit score so I'm unsure of that. However, The reason I wanted to post this is because she filed for bankruptcy a while back, I thought it was cleared, But she still has 2 more years to go before it's 100% clear. Which surprised me, Because she already has a couple of unsecured credit cards and 6% APR on this.

[Kuntry]

Thanks...that's encouraging. My chapter 7 was discharged a couple if weeks ago. I'll be shopping for a car next month.

[StartingOver10]

Your attorney was/is right! When you file BK it is best to take advantage of the fresh start.

You should be fine with a car loan, even with the surrender. I got mine at a high rate, 7.14%, but it was 3 years ago and the lenders are much easier today than they were then (credit has loosened up quite a bit now).

The F&I guy will try to use your BK against you because that's what they do. So the best way is to go to your CU first. Some CU's require a discharge for 12 to 24 months, others don't. If you burned your CU in your BK, don't go there for a auto loan, go to another one

If you end up using the auto dealer's financing - just be prepared to negotiate when you have a new BK. They will try to hit you hard, they started at some extremely high double digit rate and didn't really get to the rate I accepted until I got up to walk out. Good luck. You can do it.