Freshly discharged CH7; what are my auto refi options?

[843dk5u39mcf]

Hi all,

My CH7 BK was discharged a few weeks ago. I have an auto loan through a major auto manufacturer captive finance that a friend co-signed with me. My goal is to remove them by refinancing the loan in my name only and have a decent rate (under 7%, I know, asking a lot).  $200K+ verifiable W2 income, several new CCs with low util, 8 year AAoA, lots of equity in the car -- LTV will be about 52% based on NADA wholesale book.

I have ten prior auto installment loans and leases from captive finance and various credit unions that were PIF, never late.

I burned Penfed, NFCU, and Alliant in the BK, so a few BK-friendly options are off the table. 

Dover approved at 8.99%, DCU approved at 11%, BECU denied, going through recon now. Any other BK-friendly credit union options I should look at with a potentially lower rate than the approvals I have now?

FICO8, Experian 679, Equifax 648, Transunion 656 but Dover reports 686 FICO (not sure the score model on TU)

Thanks for your help and advice ! 

[FireMedic1]

Welcome @843dk5u39mcf 

How in the world did you file a Chapter 7 with a "verifiable" 200k a year in income. Was this a Business BK I take it? Did the Trustee turn your assets into cash for distribution among creditors. Did this occur? Not going to find lower rates with a fresh BK.

[843dk5u39mcf]

Hello @FireMedic1 

Thank you for weighing in. This was a personal BK. The means test you're referring to does not apply when more than fifty percent of the debt is business or tax related. This was a no asset case. I had liquidated assets to settle debts with creditors with my attorneys blessing prior to filing. 

Are there CU's I may have missed that are BK friendly and I haven't burned yet?  

[FireMedic1]

Well like anyone else. Those rates you have so far is about as good as it will get fresh out. As you said down the road after rebuilding you can always refi with a CU that you establish a relationship. No secret sause. Growing pains.

[843dk5u39mcf]

Hello @FireMedic1 

Thanks for the feedback. I've learned from the forums that certain credit unions are more flexible with prior bankruptcies than others.  And that interest rates are influenced by the scores the instituion receives.  Each lending instituion may choose to use different score models, which can result in various and potentially wide ranging interest rate offers.  

For example, a local CU pulled my TU and disclosed a 720 (out of 850) score, which qualified me at their 5.74% rate. They eventually declined because they "prefer" to have 18 months post-BK. I've sent a message to their Chief Lending Officer to request an exception.

I agree that time will improve my situation; however, I think there may be a way to get this loan done at a better rate than 8.99%, given the income, FICO score, and equity in the vehicle. 

Are there any other bankruptcy-friendly credit unions that I have not listed or burned in a prior BK you're aware of?  I don't mind being declined and going the recon route to pitch my case. Thanks again for your input and support, it's much appreciated.

[FireMedic1]

Please stay aware of inq's adding up trying to find the interest you want. Then plead your case after a denial. Get your foot in the door and go from there. Being so fresh out of BK. Doesnt matter who the CU is at this point. Plus with prime rates and such rising. 8.99% isnt bad. Others will chime in. Me? Take what I could get to get the ball rolling. Down the road. Refi.

[pizzadude]

I agree with @FireMedic1 , those rates aren't bad given that your BK is so fresh.  With your high income, couldn't you just pay the auto loan down faster, thereby effectively lowering the interest rate of the loan ?

[843dk5u39mcf]

Hi @pizzadude 

Thanks for your input.  I considered accelerating the payoff to reduce interest; however, for my situation, it's more advantageous to build a new nest egg and an emergency fund. So, I am maximizing contributions pre-tax to a 401K and then whatever remains after my budget is transferred to Savings. 

The short time window of inquiries is tagged as auto and hasn't yet affected my credit score. 

The monetary difference between a 5.74 and 8.99 interest rate is less than a couple of small DoorDash deliveries each month. However, I am trying to be strategic and get the best rate now.  If I refi the loan in a year, that will reduce my AAoA and result in more inquiries.

If anyone else has any other bankruptcy-friendly credit unions to share, I'd like to hear them.

[FireMedic1]

Problem is you burned number 1, 3, and 8th of the largest CU's in your BK. Here's a list to chose from. If i gave names. Theres another inq. Kinda going against the grain of helping. Choice is yours. Research the Auto Loan Sub Forum for more ideas. I actually dont have any tips. I believe I gave good advice and backed by @pizzadude on what was offered so far. Take it.

https://segmint.com/resources/blog/largest-u-s-credit-unions-by-asset-size-(1) 

Good Luck!

[843dk5u39mcf]

Hi @Anonymous 

I appreciate your time in responding. Your advice is to take the 8.99% and refi later. 

I've already searched the past year on the auto loan, rebuilding credit and Bankruptcy subs, which is how I found Dover, BECU and DCU as BK friendly options.

The list is helpful.  I'll email the executive lending officers I can find on ZoomInfo to discuss my situation to see if the CU has guidelines around Bankruptcies and if they can approve my deal at a better rate.

I'll report back on the outcome in case it helps anyone in a similar situation.