cancel
Showing results for 
Search instead for 
Did you mean: 

Looking for advice on car post c7 discharge

tag
jnassif1989
New Member

Looking for advice on car post c7 discharge

Hi all,

 

so far my rebuild is going good a month post discharge on chapter 7. I do have a question on my car. It was not reaffirmed but my payments are current. So, since the loan is reporting discharged it won't report positively on my credit report. There is still about $18k on the loan and a $450 a month payment. The car is in great shape. 2021 trailblazer with 90k for mileage. My question is, do I just continue to pay on it since currently my interest rates on a loan would be pretty high APR? 

I have two credit cards reporting currently both under 8% utilization. Do I get a credit builder loan so I have a loan reporting? Do I keep paying on the trailblazer for the next year and look to get something else at that time? My lawyer said should I decide to stop paying on it I can tell them to come and get it with no repercussions. 

thanks for any insight. 

 

Message 1 of 10
9 REPLIES 9
pizzadude
Credit Mentor

Re: Looking for advice on car post c7 discharge


@jnassif1989 wrote:

Hi all,

 

so far my rebuild is going good a month post discharge on chapter 7. I do have a question on my car. It was not reaffirmed but my payments are current. So, since the loan is reporting discharged it won't report positively on my credit report. There is still about $18k on the loan and a $450 a month payment. The car is in great shape. 2021 trailblazer with 90k for mileage. My question is, do I just continue to pay on it since currently my interest rates on a loan would be pretty high APR? 

I have two credit cards reporting currently both under 8% utilization. Do I get a credit builder loan so I have a loan reporting? Do I keep paying on the trailblazer for the next year and look to get something else at that time? My lawyer said should I decide to stop paying on it I can tell them to come and get it with no repercussions. 

thanks for any insight. 

 


There's certainly a chance they'd come get the car if you stopped paying.   What interest rate is your current car loan?

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 2 of 10
jnassif1989
New Member

Re: Looking for advice on car post c7 discharge

Oh for sure. I figured they would come get it. My interest currently is 4.9, it's just not reporting since it's showing discharged. I rolled a car over last time so it's upside down about 5k. 

Message 3 of 10
pizzadude
Credit Mentor

Re: Looking for advice on car post c7 discharge

Legally you're not responsible for the car payments anymore but I get that you need a set of wheels.

 

I doubt you'd qualify for a new loan in the single digit range with your current auto loan being IIB so might makes sense just to sit on it for now, keep paying, until you come up with a viable option / replacement.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 4 of 10
jnassif1989
New Member

Re: Looking for advice on car post c7 discharge

That's what I was leaning toward as well. Keep it for a year or so and revaluate where I'm at. Do you suggest getting some sort of loan like a credit builder for my credit mix since nothing is reporting outside of my two cards?

Message 5 of 10
pizzadude
Credit Mentor

Re: Looking for advice on car post c7 discharge

It certainly wouldn't hurt to do that.  Hard to know if it would materially help your approval odds / interest rate for your next auto loan though.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 6 of 10
jnassif1989
New Member

Re: Looking for advice on car post c7 discharge

Ok cool. Thanks for the advice. I figured getting a credit builder could just help my mix and reporting. I'll have to scout around locally for a CU that offers them. I'm in a very rural area so I'm hoping someone does!

Message 7 of 10
jnassif1989
New Member

Re: Looking for advice on car post c7 discharge

Pizza - one last question for you.

 

i have two cards reporting, should i grab a 3rd and do AZEO? Or is two fine for now? I have the Ally cash back and Mission Lane. Cap one is showing not pre approved. They were IIB albeit not much. $500. I got a pre approval for Merrick double your line but I'm not sure if I should hold out for something better like capital one or PenFed. I joined PenFed in hopes to get a card with them. I'm one month post discharge so I don't want to rush anything. All my fico 8 scores are 631, 605, 610

Message 8 of 10
jnassif1989
New Member

Re: Looking for advice on car post c7 discharge

Just an update. Pulled all my CR on annual credit and everything is reporting correctly. Decided to round out my 3 cards with the double your line Merrick. Going to garden for the better part of a year now with the 3 cards I have and let them age and practice low utilization!

Message 9 of 10
IsambardPrince
Established Member

Re: Looking for advice on car post c7 discharge

If the car was discharged but you're still paying, they have no right to pick it up unless you stop paying, but they are barred by the discharge from reporting missed payments or repos on it now.

 

If you like it, keep it, and make the payments.

 

If you don't, you can stop making the payments and figure it will disappear someday. Easy peasy. Drive it until then.

 

It's actually a great idea to not reaffirm a car loan on something you want to keep because no matter what you want to do with it you can. It gives you the option to keep it or stop making payments later and let them repo it, but they can't do anything else. Win-Win

 

If you start having SERIOUS car problems that are too costly to even mess with, you could just stop making payments, all they can do is pick it up.

 

But until you stop making payments, they can not take the car, and would have to give you the title if you pay it off.

 

A car loan is basically two things. A promise to pay. And a lien on the title that says they can take it back if you don't. The discharge relieves you of your obligation to pay, leaving just the lien until it's paid off. This is why they could take the car, but they can't sue you or report missed payments or a repo. You have like the ultimate car loan now as a side effect of the bankruptcy.

 

If you're close to paying the car off, or you had better terms from when interest rates are lower, I think as long as the car is in good shape, you'd be hard pressed to do better now with a bankruptcy on your record. That's why most people would opt to keep the one they have.

 

You won't love the one you get if you have to go to a "bankruptcy lot" where they make you pay by the week and put a starter inhibitor on it in case you don't show up by Friday. Smiley Happy

 

In my bk7 I let a 2018 Kia Soul go. It was barely a year old when I lost it by doing a "abandonment repo". My ex was a co-signer and there was a, erm, court order telling me I couldn't contact him. So Kia wouldn't take it back without me getting in touch with the guy I could go to jail for contacting (at that time), so "unofficially" the woman on the phone said I could abandon it at a Kia dealer and take the plates off and take everything from inside the car with me, and they'd get it back to the finance company.

 

They ended up charging my ex over $5,000 to get the car back, and $4,000 of that was just to park it in Wisconsin for a couple weeks.

 

I didn't even try to save my car because of his name on the title. He did me dirty enough times. Time to let him have it.

 

Anyway, he never installed the security patches and he told me that it was stolen and destroyed in the "TikTok Challenge" by a vagrant in Seattle later on. The insurance company of his declared it a total loss.

 

If you file bankruptcy on a joint car loan, then they just go after the other person who is on the loan. That's why it's so much easier to get a car if you have a co-signer.

 

If someone ever asks for a co-signer, ask them why they can't get a car on their own.

Message 10 of 10
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.