@Anonymous wrote:I'd appreciate any advice you have for me to get out from under this somehow. Thank you.
Here's the backgroud info:
- Leased vehicle was repossessed in Jan 2019
- Filed Ch 7 BK in Feb 2019 (included debt to auto creditor) at a FICO score of 568
- Purchased a used 2014 Subaru Outback Limited in Apr 2019 under the following terms:
$2000 down payment
Financed $21,085.87 for 72 months
On a rate reduction program that started at 15.99% and is now at 14.49% with lowest possible rate at 14% for remaining life of loan
Ch 7 BK D/C in Jun 2019
Started payments in Jun 2019 at $500.00/month ($454.36 is minimum due) and have perfect payment history
Payoff amount as of 02/19/2020 is $19,339.28
My current credit scores are: 630 (EX), 660 (TU), and 670 (EQ).
My only debt at present is my auto loan.
Current KBB trade-in value average listed at $11,202 which leaves me on the hook for approx. $8,137.
Current KBB private party value average listen at 14,407which leaves me on the hook for approx. $4932.
Either way it's clear that I'm upside-down on this loan for several thousand dollars. If I were to continue paying $500/mo x 63 remaining months at the lowest rate available from this lender at 14% I believe I'd be on the hook for the remaining total of $23,749 including interest.
I need to find a way to get out of this. I'm paying through the nose on an aging vehicle with current mileage of 79,500. I drive an average of 10,000 miles/year. I'm told I do not qualify for refinancing my auto loan due to being upside-down AND because my BK was so recent. I'm also told lenders want to see a minimum of two years' perfect payment history post-BK. Would it be more advantageous to purchase a new vehicle of same make/model, apply the trade-in value of my car against the purchase price, and roll the balance of the original loan into the cost of the new loan at a lower APR? I can increase my car payment from $500 to around $800 if needbe. Also, my retired mother lives with me so we pool our money together. She also filed Ch 7 BK which was D/C in Sep 2019. She has zero debt. Her current credit scores are in the mid-600s and she's willing to co-sign on a new loan if that's the route we should go.
I would look into a Local CU and see what there LTV is if you can find one for 120% or 125% LTV. You could refi now and have a lower rate and lower payment and just keep paying the 500 you are already payying now. I know personally I have a cu in my area that will go up to 135% LTV. Your EQ and TU are pretty decent. I am pretty sure you could cut the rate in half. But if you and mom both filed BK. I would not recommend buying a new vehicle. I would work on repairing both of your credit and building it back up no sure what the circumstances were that led you both to BK but you would like to not revisit that path again I am sure.
