When/how to buy a car?

[Anonymous]

We have a van we are thinking we will let go in our chapter 7.

We filed august 14
Meeting with creditors oct 15th

It's a 2012 dodge caravan we owe over 14k.
It's worth maybe 7 to 9 k. It's the most basic model and needs a new windshield/ tires soon etc.

My question then becomes... if we let it go.. do we still use it until discharge?
Is it best to get a loan for a car before or after discharge? And how do we find loan places? We have 3 kids and live in an are where there is basically no public transportation even though things are spread. It will be winter and with baby we will need SOMETHING.

I would prefer to get a 5k or less car and pay off fast, but it sounds like that may not be a possibility?

I'm at a loss of what to do in this regard honestly. Do we apply for loans now? Wait until after discharge? Will either of those make a difference? We cant wait months after, it would have to be days at most. (And that's pushing it honestly.. would only work if we got to keep the van until then)

Last question, if we got a loan before discharge... would it still help build our credit? Our is it only loans AFTER discharge?

[audio-disabled]

If you do let it go, usually bank would want the vehicle back even before the discharge.

While you are in BK, yes it is possible to secure another vehicle, however you will be impacted with high interest rate. In my situation, I secured an auto loan at 22% with Consumer Portfolio Services lender while in BK. After 6-7 months of on-time payment, I refinanced with a CU at 13.3%. 

If the bank takes your vehicle before discharge, you will need to find dealership that have bankrutpcy specialists. Dealerships who tell you that you can't get a car while in or fresh out of BK don't know what they're saying. 

If you somehow were able to keep your vehicle until after discharge date, you will be able to get better rate. Even if it's still high, I do recommend after 6-months of solid payment, you can refinance with a local CU or elsewhere.

Some dealerships may require financing at a minimum total loan amount. In my experience, at a dealership, I was told the minimum to finance was at $7,500. I had to finance something more trusty and reliable - 2009 CR-V EX @ $11k with 117k miles.

[CH-7-Mission-Accomplished]

You should check with your existing lender and see if they will let you keep the car if you keep making the payments -- even though you don't reaffirm the debt.  Capital One allows this.   I did it and just paid off my car loan.   It doesn't hurt to ask and if you can wait until after discharge, you will get a better rate, and if you can wait another six months until after you've opened one or two revolving cards and an installment loan (like a share secured loan or a self-lender loan), you will do even better.   As an example you might pay 25% for a loan before discharge, 18% right after discharge, and 8% six months after discharge if you have done a little rebuilding.