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reaffirm or keep car! Need advice please!

mlorin1
New Member

reaffirm or keep car! Need advice please!

Need some advice please 

I planned to keep my current vehicle through GM financial- payments are $460 with 8.9% rate, I have a co signer on the car. However, after reading through here I think it might be best to turn it in. It has 105,000 miles on it and I feel like it's shifting weird. I don't want to get stuck with a vehicle that's about to have problems.

My debtor meeting is November 31.  I'm moving in two weeks and have Christmas next month,  I will not have a down payment before the first of the year. 

Problem is, I'm afraid if I turn it in I won't be able to get something immediately. I have to have a vehicle before they take this one I also don't want to downgrade. I also don't want it to hurt the co borrowers credit. I live in Ohio, idk if that makes a difference or not in regards to co signer.  Also, my salary is about 65,000/year. 

advice??

 

9 REPLIES 9
maxo-bk
New Contributor

Re: reaffirm or keep car! Need advice please!

I would assume that your cosigner will still be responsible for the car loan, despite your bankruptcy filing.
Discharge Date: 7/24/2018

Message 2 of 10
DebtStinks
Established Contributor

Re: reaffirm or keep car! Need advice please!

Ditto what @maxo-bk stated. If your co-borrower did NOT file BK, they are still liable for the debt and if you "let it go back" it won't do any more damage to YOUR credit but can still negatively impact the co-borrower who did not file.

 

Best of luck!

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Message 3 of 10
angelofmusic86
Frequent Contributor

Re: reaffirm or keep car! Need advice please!


@mlorin1 wrote:

Need some advice please 

I planned to keep my current vehicle through GM financial- payments are $460 with 8.9% rate, I have a co signer on the car. However, after reading through here I think it might be best to turn it in. It has 105,000 miles on it and I feel like it's shifting weird. I don't want to get stuck with a vehicle that's about to have problems.

My debtor meeting is November 31.  I'm moving in two weeks and have Christmas next month,  I will not have a down payment before the first of the year. 

Problem is, I'm afraid if I turn it in I won't be able to get something immediately. I have to have a vehicle before they take this one I also don't want to downgrade. I also don't want it to hurt the co borrowers credit. I live in Ohio, idk if that makes a difference or not in regards to co signer.  Also, my salary is about 65,000/year. 

advice??

 


I'd agree with the previous replies, but I'm curious, how much longer do you have on the loan and what is the balance of the loan?  

I kept/reaffirmed my car/loan, but I mildly regret it; however, I don't have a cosigner so it didn't impact anyone else's credit.

CH7 Filed 05.01.2020; Discharged 10.21.2020

10.22.2020 FICO8 Scores: EQ 615 TU 560 EX 581
04.08.2021 FICO8 Scores: EQ 665 TU 672 EX 661

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Gardening until November 2021.
Message 4 of 10
jmw1
Regular Contributor

Re: reaffirm or keep car! Need advice please!

Disregarding the co-signer, it is a no brainer to give this car back. A cash car with similar mileage and no shifting issues should be around $8000. You can get a $2000-$3000 junker to get by that doesn't have shifting issues and doesn't have that high monthly payment even though the miles will be higher. 

 

Usually it takes a good while (weeks to months) for the lender to repo the car while in a bankruptcy. It's not like non-BK where the lender can send the repo man real quick without telling you. You can drive it for free in the meantime. If it doesn't break, great. If it breaks, it won't be on you. No way they repo prior to the 341 meeting. You could stall it by requesting reaffirmation and not signing the paperwork when you receive it. You'll make $460 a month towards your cash junker in the meantime. 

 

The co-signer getting screwed over majorly is the only negative to giving the car back. But you are really hampering your fresh start by voluntarily stiffing yourself $460 a month on a questionable car. 

Message 5 of 10
mlorin1
New Member

Re: reaffirm or keep car! Need advice please!

I don't want to burn the co signer, it's my mom. I also figured I could trade this car in… But the amount of negative equity I'm gonna roll is ridiculous. I owe about 20,000 and still have 4 years on it give or take.

 

What about the option to keep and pay but it doesn't show on your credit report you don't have access to the online features.... would that option burn the co signer too?

 

Basically, I'm stuck with it. 

Message 6 of 10
ZX14RIDA
Frequent Contributor

Re: reaffirm or keep car! Need advice please!

I would say you pretty much stuck with it. You definitely would be burning your co-signer. Only way to really avoid that at point would be to somehow sell it if that was possible. If not for full price sell for much as possible and pay the difference is an option. If that's an option in your situation.

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Message 7 of 10
jmw1
Regular Contributor

Re: reaffirm or keep car! Need advice please!

You reaffirm the debt.  The day after your transmission breaks. You are now down $20k in the hole with no transportation and your mom is also 20k in the hole. Can you pay for two cars while only able to drive one?  Can your mom payoff the car loan by herself as a gift to you?

 

Don't roll the debt. You are already screwing up the benefits of your bankruptcy just by reaffirming and rolling just digs a big huge financial hole days after your discharge. You should have been buying cars with cash only or a cheaper used car all along. Rolling doesn't make the debt disappear. 

 

Your co-signer problem also nixed another possible solution which is the 722 redemption loan in a chapter 7. The 722 was designed for a situation like yours. Unfortunately, the lender won't agree to a 722 with a non-filing co-signer responsible for the full balance.

 

Here is what I think. You reaffirm and get a second job and do the rice and beans diet to get rid of the car loan ASAP. Look up Dave Ramsey videos on car loans. Then get a cheap cash junker car once the current car's transmission dies. I'm serious about getting another job since your car is not going to last. The other option is to burn mom or have her payoff your car loan. If you're not going to burn mom, you need another job today due to the tranny.

 

Message 8 of 10
DebtStinks
Established Contributor

Re: reaffirm or keep car! Need advice please!

@mlorin1 What you referenced in the "keep and pay but doesn't show on your credit report" option is when you DON'T reaffirm the debt. In MOST cases like this, especially when there is a NON-BK co-signer, the lender has zero issues with you NOT reaffirming as long as payments are all made on time.

 

Considering it's your Mom, this might be the route I would personally go. It ensures (for now) as long as you make the payments on time your Mom's credit isn't dinged with a derogatory account...and (God forbid) if your Mom's credit takes a negative turn on one or more of HER individual accounts in the future before the loan is paid off, you can then look at surrendering the car since her credit would have already taken a negative hit and you wouldn't have the weight on your shoulders of "ruining your Mom's credit."

 

Best of luck whatever your decision may be.

PenFed Visa Signature $35000 (Opened 6/20) - NFCU More Rewards AMEX (Opened 1/19) $17000 - NFCU Platinum $15000 (Opened 1/21) - Capital One World Elite MC $11200 (Opened 11/17) - TTCU Platinum Visa $10000 (Opened 10/18) - Uber Visa $5000 (Opened 1/19) - Target Store Card $2000 (Opened 10/18) - Floor & Decor Store Card $36500 (Opened 10/18)
Total CL - $131700

CH7 BK Filed 8/1/17 Discharged 11/7/17

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Message 9 of 10
angelofmusic86
Frequent Contributor

Re: reaffirm or keep car! Need advice please!


@mlorin1 wrote:

I don't want to burn the co signer, it's my mom. I also figured I could trade this car in… But the amount of negative equity I'm gonna roll is ridiculous. I owe about 20,000 and still have 4 years on it give or take.

 

What about the option to keep and pay but it doesn't show on your credit report you don't have access to the online features.... would that option burn the co signer too?

 

Basically, I'm stuck with it. 


I don't have any advice/experience with the option you listed, but unfortunately, it does seem like you might be stuck with the car if you don't want to burn your co-signer/mom.

 

As someone who has dumbly rolled in negative equity into a new car - DO NOT DO IT at all costs if possible.  If you are able, I would hussle as much as possible with a possible side-gig or 2nd job, cut back expenses as much as possible, and try to see if you can pay that 20k off ASAP.  Because if something goes wrong, you're going to be stuck with that 20k in someway or another unless it is paid down some.  This is just my opinion (and may not be the best advice), but maybe even pay down the loan to where the negative equity is negated for when it is time to trade in. 

I wish you the best luck - this isn't an easy situation for you for sure.   Unfortunately, the fact that your mom is a co-signer who you don't want to burn really complicates the situation where otherwise it would be a no-brainer to not-reaffirm.

CH7 Filed 05.01.2020; Discharged 10.21.2020

10.22.2020 FICO8 Scores: EQ 615 TU 560 EX 581
04.08.2021 FICO8 Scores: EQ 665 TU 672 EX 661

Rebuild progress: Kohl's $300, CreditOne Rewards $700, CapitalOne QS $0AF $3,000, PenFed PCR $3,500
Gardening until November 2021.
Message 10 of 10
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