Bankruptcy and Vehicle Financing



  • csuvcsuv Member Posts: 25
    I knew a guy who paid 25% interest to buy a used BMW 5 series. It's not because he had filed bankruptcy or had bad credit. He did not have credit history. He loved BMW but only had a couple of disposable cash at that time. I just think that's unwise. he could have used that few thousands to buy a reliable used cars for a few years and saved more cash and made his credit history longer after one or two years. After that he could be able to buy a BMW at normal interest. But he loved that and did enjoy it. So...
  • bongo2363bongo2363 Member Posts: 7
    Well, I did get my reports and it reads on some accounts "Paid/Closed/Current, was past due 30 days", "Included in Bankruptcy", and "Discharged through Bankruptcy Ch. 7/Past Due 180 days." What I don't understand, is the accounts that show past due were all included in bankruptcy, bur were not really past due. It probably took a few months for the discharge to go through, therefore showing past due balances. Do I have to call every one of those accounts and let them know that it should not show past due, or is this normal to show up on a bankruptcy credit report. Also, I have 2 accounts that are "Inactive/Never Late" showing up on my report. Should I also call them and close the account or just leave them this way?
    I am also going to apply for a loan at my credit union before I go to the dealer. Will they generally have better percentage rates than the dealer and should I go in the dealer without telling them I have a loan already and see waht they offer me?

    Thanks for the previous advice!

  • subprimeguysubprimeguy Member Posts: 2
    "You are correct. The problem with that is the Trustee normally will not give you permission until you have an approval in hand with all of the exact figures. The banks typically will not give you an approval until you have a letter from the Trustee. I've been doing this for 7 years now and have never been able to make this situation work"

    Try Drive Financial. They will give you an approval stipping for the Trustee Letter. It's easy here though. The Trustee will send the customer in with a payment call nonobjection letter. Affiliated will buy them too, but for me was a funding nightmare.
  • lotus29lotus29 Member Posts: 8
    I got seriously sick and was abruptly fired after 8 years on the job, losing medical insurance, a home with perfect repayment history, a 750 beacon score and even the ability to afford my prescription medications. When I stupidly attempted to return to work early, I came to in a large pool of blood staring into the face of a paramedic. Both my newer cars were repossessed. I procrastinated filing bankruptcy until I was literally inundated with lawsuits from furious creditors. I had to move 450 miles to find a new job, relying upon a battered 35 year old VW Van to commute after a 33 year old Chevy pickup blew up on the way to the airport, where I simply left it. Once I was driving in the city in that VW Van and a complete stranger came up to me and forced me to accept $20 because "Jesus had told him to." At one point, I took in a roomate to afford food and because he had a running vehicle. My wife was 450 miles away sponging off my parents while she finished grad school. For over a month, while I was saving to buy a house, I lived on cartons of MRE's that I had bought in better times as backpacking food. When my wife was able to move to be with me again, our 1989 Saab that she had been relying upon for a weekly 500 mile round trip to grad school suddenly blew a head gasket. We had one car left: a 1986 Chevrolet sprint that we bought cheap after a tree fell on its roof, 278,000 miles. The day we went into Court for our BK hearing was an extraordinary bleak day, with the ugly bent Sprint sitting outside, looking like Ma and Pa Kettle.

    So I richly deserve the venom expressed on this forum towards "deadbeat debtors." Thank you so very very much for your kind comments! May you in the future, suffer a similar train of misfortune!!

    Now I will adress the laughably ignorant comments made about credit and financing post-BK.

    I actually commuted by bicycle 24 miles per day for about 6 months post BK petition. We bought the bicycle over the border in Canada from a Canadian dealer because no American dealer would finance one. I got into great shape and cured my own medical problems with the incredibly punishing physical regime. Our discharge date was August 8, 2004. Out of gratitude, we bought two more new bicycles from that Canadian bicycle dealer.

    We bought an owner-financed house in March, 2004 at 7 percent interest, two months pre-petition. It has appreciated 36 percent since the purchase date and I am in the process of getting an FHA mortgage at 5 percent, but have to wait exactly one year from discharge. I just recieved a $12,000 a year raise. When the Saab puked, we bought a 4 year-old Honda Civic at 18 percent interest, payments $300 PER MONTH. I then joined the local credit union and got a 2003 Mazda 4x4 (with 6,000 miles on odometer) pickup financed at 10 percent and payments of $300 month and no down payment, other than the ugly Sprint.

    My wife started her own business in January 2005 (about four months post-discharge) and it is strongly booming. She has already been approved for two standard credit cards with $5,000 credit limits. In order to improve our credit rating we just traded in the Honda and the Mazda on a BRAND NEW PT Cruiser and BRAND NEW Jeep Liberty. The PT Cruiser was at 5.9 interest and the Jeep was at .9, and we walked away with $4,500 cash from rebates and refunds from the GAP insurance and Service Contract on the two used vehicles. PT Cruiser payment is $350, Liberty payment $400. I emphasize, we are not yet one year post-discharge.

    If any car dealer or Mortgage Broker tells you the above story cannot be easily duplicated, RUN, DO NOT WALK, THE OPPOSITE DIRECTION. They charge high interest rates because they make more money on interest than they do on the car itself. It has nothing to do with your credit rating. NOTHING! With a 750 Beacon pre BK score, I was paying 14 percent interest on a used Ford Focus, 9 percent on the mortgage, and 12 percent on a five year old Jeep Grand Cherokee (those are the two cars that were repossessed). The Grand Cherokee was also humiliatingly left at the airport when its transmission blew and we flew home. Payments on the Ford Focus were $359, on the Grand Cherokee $500. The Saab was financed at 13 percent.

    My advise: Don't listen to these idiots about BK, nor about post BK credit and auto financing. All this talk about "responsibility" is cover for greedy, rapacious, predatory lenders.
  • lotus29lotus29 Member Posts: 8
    Anybody who does not immediately join a Credit Union after BK should be involuntarily committed to the loony bin. That is the FASTEST and Cheepest way to recover your credit rating. Imagine this: Credit Unions are there to HELP you, not screw you! It is a true story!

    Anybody - BK or no - who allows a car dealer to stick them with interest rates more than about 10 percent is committing financial suicide by degrees. Anybody who allows a dealer to screw them on a below trade in value on their trade in is nuts. Dealers LOVE to call your trade-in "upside down" when it is clearly NOT.

    DO NOT buy extended warranties. They are junk! Be creative! When the head gasket and flex plate went out on that Saab, I found an extremely innovative and hungry mechanic, who came up with brilliant and cheap solutions. Total cost? $1,200. This was the most expensive repairs EVER on a vehicle that now has 138,000 miles on it. I was quoted as much as $1,500 on EACH of those repairs!. Guess what your extended warranty costs with interest? Do you want to know? Wouldn't it be a lot easier and cheaper to take responsibility by surfing the web and discovering the cheapest remedies for yourself? I'm not a mechanic, but I learned fast when I approached commuting on foot.

    Do you think your General Practitioner Doctor is keeping up with all the information on the most current medications and treatments? Are you kidding? If you have the brains to read this webpage, you are smartest enough to discover for yourself what the BEST and CHEAPEST medical remedies are, then DEMAND that your doctor treat you with them.

    The internet, the difference between life and death in financial recovery.
  • isellhondasisellhondas Member Posts: 20,341
    Until you got nasty.

    Sounds like you found a shadetree mechanic to fix your Saab? Great! Sometimes a lot of money can be saved if you find a moonlighter who knows what he's doing. It's a risk and a gamble compared to taking it to a trusted shop, but it sounds like it worked for you.

    An extended warranty is like any form of insurance. If you need it, you'll be very glad you have it in place.

    I'm glad the BK laws were there to protect you. That's what they are in place to do.

    Not every BK is the result of financial mismanagement and friviolous spending but many are. As a former business owner who was "taken down" by a couple of these people I can attest to that.

    BTW, once you got back on your feet, did you repay the people included in your BK?
  • danf1danf1 Member Posts: 897
    from a bankruptcy attorney. Overall a good story, but some parts seem to be a bit of a stretch.

    And as far as interest rates are concerned, that has more to do with the bank than the dealer. The bank tells us what your rate is. We don't make it up just to penalize you.
  • lotus29lotus29 Member Posts: 8
    How much money do you make on a sale when a customer finances a car through a Credit Union? The same as you do with those horrible banks that supposedly unilaterally dictate your interest rates? Of course not, and therein lies the point of my argument.

    If banks are dictating interest rates to a dealership, then it is time to find a new dealership, one that has more financial pull. What I discovered is a two-fold secret:

    1). Bad Car dealers don't work with Credit Unions and the reason is plain and simple;

    2). Your interest rate depends upon the car dealer you go to, and a good car dealer can and will easily beat the interest rates of even a great Credit Union, hands down.

    I learned these hard, hard lessons because I had to. I am not a bankruptcy lawyer. I won't name the car dealer where I got those excellent interest rates, but they tout themselves as the largest internet dealer in the world, and the largest Chrysler dealer in the world. (So many people fly across the country to buy cars there that they have complimentary regular shuttle service to the airport 70 miles away). The smartest thing I did was to not even visit the lot until I was preapproved for the interest rates and the price on the car I dictated, which was done over the phone. I never saw either of my two new cars or the salesmen I worked with until I traveled to the dealership in the trade-in to take delivery of the new ones.

    All dealerships are not created equally, and neither are all banks and credit unions.

    Like I say, if your dealer is not getting you those kind of interest rates and those kind of deals, then find a new dealer. Its your money. I will not be easily convinced it is tied to your credit rating.

    I still think, without any proof whatsoever to prove my theory, that the best way to buy a car would be to get preapproved financing by a Credit Union, get the car you want off Ebay at the price you bid to pay, and then to fly off on some godawful trip cross country to take delivery.
  • isellhondasisellhondas Member Posts: 20,341
    Is absoutely tied to your credit rating!

    If you were a lender, bank or credit union, would you give the same rate to a person with long term, stellar credit that you would give to a recent BK person??

    Your point # 2 is totally wrong. How can a dealer beat the best rate offered by a credit union or a bank?

    Dealers don't care how you finance and I would think they ALL work with the credit unions. We want to sell cars and we will use whatever lender that works!
  • rroyce10rroyce10 Member Posts: 9,332
    ........ I Agree with Isell ... I "loved your story" until you got nasty and blasted the whole world ....

    Bankruptcy is not a good thing, and it going to be alot worse come October, but that's a story for another time and place ....

    For the folks that have 3 very expensive cars, $15,000 dining room tables, a 40ft boat they can't afford and just can't miss those Vegas junkets to lose another $20,000 and their credit cards are $12.00 away from that $25,000 limit - then there should be something besides "Bankruptcy" - maybe jail ..... but for folks like yourself, it can be very sad and very demeaning, but you can't blame the dealers ...

    The biggest problem today is the FICO scores .... the lenders use it and the mortgage companies use it, the whole world revolves around a number (real or not.!) .... is it fair.? Absolutely not.! ... We have banks lending money on Refi's for a 110/115% of LTV, they also are lending money to folks with $3,000 down on $300,000 houses and they don't even have enough money to drop furniture in it -- and it goes on and on .... I feel bad for someone like yourself and obviously you have a lot of pent-up frustrations, and I don't blame you ...

    I probably see 200/300+ credit reports a month and some of these folks make $150/$300,000++ a year and they're only 15 minutes away from a BK ... no sickness here, no family trials or tribulations, no job loss, they just won't count money or they think the Money Tree will never fail - for these folks, I have no sympathy - None.!

    I guess I'm just from the old school, when I could call one of my lenders and tell him about someone on Chemo for 9 months or a bad accident where somebody was in the hospital for 30/40 days, or maybe shoulder surgery that put the girl up for 5 months .... I didn't say todays "deal" was fair, actually it's pretty raw, I guess I'm a firm believer of "protect our own" and not a believer of sending billions of tons of food across the world and lending even more to places that will hate us anyway and never pay us back, especially when we have folks here that need healthcare and they're living in a Maytag refrigerator box ....... It's a great country we live in, we just make some stupid mistakes.

    I'm glad things are working out for you and your's .......

  • lotus29lotus29 Member Posts: 8
    "I guess I'm just from the old school, when I could call one of my lenders and tell him about someone on Chemo for 9 months or a bad accident where somebody was in the hospital for 30/40 days, or maybe shoulder surgery that put the girl up for 5 months .... "

    Yeah, the good old days........Now, before they sue you (less than four months after your last payment), they call sometimes three or four times in one day. And do you think they give a rat's [non-permissible content removed] about your medical disability? Hence, my venom, which I believe is shared by many people in my same situation.

    Although lately, it does seem like lendors are taking into account my flawless pre-sickness payment history, the terrible abrupt drop into complete and abject poverty, and the nightmare of involuntary BK. So I am a lot less angry than I used to be.
  • cticti Member Posts: 131
    I probably see 200/300+ credit reports a month and some of these folks make $150/$300,000++ a year and they're only 15 minutes away from a BK ... no sickness here, no family trials or tribulations, no job loss, they just won't count money or they think the Money Tree will never fail - for these folks, I have no sympathy - None.!

    I know this person. I call him, "Dad". :P :P

    And it is odd he has frittered away his money after making tons in the go-go 90s in the California telecom business because his parents were poor. You think he would have learned.

    It's why I posted in the RWTIV forum about the value of my Dad's car.

    Me- I'm in the military - job security!
  • cadillacmikecadillacmike Member Posts: 543
    Because of very badly disguised profanity! Where are you Kirstie?
  • Kirstie_HKirstie_H Administrator Posts: 11,127
    I was out at the bars :)

    Nope, that one is actually OK, as long as it it not in reference to another person, e.g., " XXX person is a real ___."


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  • patstratpatstrat Member Posts: 2
    A friend of mine is looking for a car...used.. from 2000-2004 range
    wants a suv actually...placed applications over the internet and over the phone.applied to places that said *BAD CREDIT- NO CREDIT- BANKRUPTCY-OPEN OR CLOSED- SLOW PAYMENTS- SCORES AS LOW AS 400..WE HAVE A PROGRAM FOR YOU!!!*
    ok,,, so my friend has bankruptcy that was discharged in 2000 and some slow payments........and his score is around 500.... A salesman called and said that they would be able to help with a the way there was no downpayment and no trade in...said that there was a rebate program going on now and he could use the 3000 rebate as a downpayment... we live in Philly went to the cherry hill triplex... also said that if we had any problems to give him a call and that there were 2 salesmen that could help him... ok so we get there and the two salesmen of couse were with someone else...we had someone else help us
    he ran his credit again....( i dont understand..the credit was already looked at online before we got there..why did they run it again?) went away from his desk and came back saying to come out to look at which car he would this point the salesman was told that he (my friend) had already talked to someone before coming here about his *situation *,,salesman said...*ok no problem*
    ummmm....needless to say this salesman says to my friend that he would need a good cosigner or a 3000 down payment in order to get a suv... so nothing was mentioned about rebates and he told the salesman that he did not have a downpayment....
    makes me wonder...what was the point? Time on both ends were wasted and nothing was done.... called orginal salesman he says that he would talk to his General Manager..ummm yeah right.....

    thanks for listening...........
  • rroyce10rroyce10 Member Posts: 9,332
    ... **placed applications over the internet and over the phone** .....

    Sincerely, I feel for your friend ...... but what was he doing "shot gunning" the internet and strangers with his bad credit.? .. he should have been talking with a local loan officer or "someone" like a Credit Union that could at least tell him where he stands .....


    So what am I missing here.? .. furniture stores use it, mortgage companies and jewelry stores run these ad's everyday .. and based on your post, they did have a program, he just needed some big $$ down and a co-pilot - as he should, he had a 500 score that was probably a 580 before he dropped 10 applications ....

    I understand your anxiety, but what has your friend been doing for the last 5 years, living in Tibet..? .. if his BK was in 00 and lets say it charged -off in 01, he could have "jump started" his credit via Credit Cards and some $4,000 loans at the local lenders .. sure the interest is going to be high, but that's the flee's that come with the dog, but at least he's up and runnin' ..... so, in the year 2005 he decides he wants a new driver and "Wango Tango" he has no cash.? ... if he's had no debt for the last 5 years, what was he doing with all his excess money .. investing in the Boston subway ..?

    A waste of time ....? .. you're right, he wasted the dealers time by having no cash and sitting on his hands for the last 5 years ... unfortunately you had to sit through it .....

  • lotus29lotus29 Member Posts: 8
    I agree with the last writer. You would have to almost willfully attempt to keep your credit scores low in order to have the same outcome....

    5 years? I think more like 2 years at best Post-BK for a car with no down payment.
  • ltatumltatum Member Posts: 1
    My lease is up on a Honda CRV 2001 and I am wanting to keep the vehicle. I filed bankruptcy approximately 6 - 9 mos ago. What options do I have at his point? We have made all payments on this vehicle and our 2nd vehicle. The Honda is financed currently through Honda finance. Before anyone gets nasty in their response, please remember you never know anyone's reason for being in this situation. I would appreciate responses from F&I. Thank you.
  • kellidkellid Member Posts: 5
    Hi all,

    I've read a lot of good info here, I am glad I found this place, anyway here husband and I relocated to FL from TN in 2001, things did not work out, we came back home in 2002, of course when we came back we had no money, no jobs, no place to live and two small children and two vehicles that could be used to get us to work, when we found jobs.

    We lived w/ my inlaws for 6 mos (nightmare)., while there we filed ch. 13 (mainly to keep our cars), my husband got a job a month before we moved out. We got an apartment, before 13 showed up. Stayed in Aptment made timely payments, after one year we started leasing a house in 2003, we are still in the house, have NOT been late since we have been there, we signed an agreement w/ Landlord not to put lease under 13, we've kept our word and we've been on time.

    As it stands, my 1996 plymouth voyager died, 186,000 miles the motor is gone. We talked to BK lawyer, she was very hesitant about filing motion to purchase, she wanted us to file 7 in order to give cars back, we told her NO....we do have some pride in at least trying to pay some of our creditors back. She was persistent, she said the motion to buy is a lot of paper work and it would take about a month, and our BK payments would go up by 70% (any truth to this?).

    We told her we would go and beg for mercy from the Trustee, we just need a car, preferably another minivan, my kids are still in carseats. She reluctantly said okay today..she said its going to take a month in order to have a hearing, (does it normally take that long?) any whoo, I talked to my credit union, CU lady specifically said a BK is not automatically a denial, she said they will look at our credti score, which now is 630, our salaries and our trustee letter. I don't want anything fancy, I do want something reliable, I have found a 2000 used Odyssey 93,000 miles for 10,900, my attorney said she is going to ask for 12,500, no more.

    Can anybody tell me why my attorney is so reluctant?, what is her hesitation, she did say its a lot of paperwork and ch. 7 would be easier? does she get pd. more for ch. 7?
    , We are renting our home from Remax Realty, the guys have been very nice in working w/ us and he told us to stay away from ch. 7 if we plan to purchase the home we're in or a new one... and we are listening to him. I know this is a long post, but could somebody give me insight, or at least some hope.

  • steine13steine13 Member Posts: 2,789
    A $12k (with tax), 6-year-old minivan on credit, for someone with their financial back to the wall? I think that's a very bad idea.
    Another year and the timing belt is due, along with other maintenance, at 105k. You do not want to skimp on that, and it's gonna be $1,000 or more.

    So you have two kids in car seats. Don't risk their financial security in order to drive a big car. You want one, I understand that, I got an '00 Villager for similar reasons... but I paid cash for it. On borrowed money, I would have gotten something else.

    For you, I'd recommend a new Vibe or Matrix -- tons of room in the back seat, honestly -- or perhaps a cheap Corolla. Similar money upfront to the Ody, but they won't need anything but gas and oil while you pay them off. Maybe two- or three-year-old Vibe, those can be a great deal.

    I love minivans, we own two and have owned two more in the past 5 years... and I have not found a way to drive one for under $200/month, new or used. And I know from cars.

    My Vibe is costing me $100/month in depreciation, has needed no repairs, and I bought it new. When money is important, and you don't have the financial leeway to fork out $1-2,000 on a surprise repair, a Japanese 4cyl car is the way to go.

    Good luck,
  • kellidkellid Member Posts: 5
    "A $12k (with tax), 6-year-old minivan on credit, for someone with their financial back to the wall? I think that's a very bad idea"

    Thanks that's why I am here, I guess I figured Honda's are such good cars, I am going to continue research my options, but I had to give the courts a figure.
  • kellidkellid Member Posts: 5
    Just wondering if anybody else has any advice, on purchasing a 12K used 2000 Honda Odyssey, it has 93000 miles, I am currently in an open CH. 13, and I have to get a trustee letter from courts.

    I am going to try to get financing through my Credit Union. I have established new good credit, w/ my Landlords, Remax Realty, have had on time payments for past 2 years.

    My BK will be done in 07' , hopefully by 06' since I hear my BK payments will double. Of course the new used vehicle will be financed outside of the BK.

    Thanks for any advice.
  • rroyce10rroyce10 Member Posts: 9,332
    ....... I would have to see your credit report ....

    The big negative here is you filed a "13", not a "7" .. and most times, "13's" can follow you around like a bad in-law for the next 3/7 years .... have you tried a local Lender/Credit Union ..?

  • lotus29lotus29 Member Posts: 8
    I think you should follow your attorney's advice: convert to Chapter 7, dump the beaters, and start over again. THAT is why your attorney is so reluctant to plead with the court for the used up Honda Odyssey for 12K. You will not improve your credit on the course you are following. Your attorney knows it and doesn't want to participate willingly in your self-determined path of screwing yourself.

    Then go down and buy a brand new Kia or Hyundai minivan (I cant recall which one of them has a 100 K warranty). They will finance ANYONE. Reestablish your credit by paying through the nose for the first six months at some godawful interest rate picked out of thin air, then refi. Or finance them through your credit union.

    When I bought the used Honda, I wish to god I would have listened to that very very helpful and honest finance manager who practically BEGGED and pleaded with me to join a credit union rather than finance the car through Transouth at 18%.

    Your attorney is trying to help you. Let them.
  • rroyce10rroyce10 Member Posts: 9,332
    .... **Can anybody tell me why my attorney is so reluctant?, what is her hesitation, she did say its a lot of paperwork and ch. 7 would be easier? does she get pd. more for ch. 7?** ...

    I missed that little paragraph .. -duh.!- ..... just like the poster above said "he knows the best way to go" .... $13's..? .. and like I mentioned, these things can drag on until the second coming of Jesus and lenders hate em' ........ if ya gotta go, do a "7" ....

  • lotus29lotus29 Member Posts: 8
    The great big ugly elephant in the room is the 1996 Voyager with 198,000 miles. Without a 7 discharge on the underlying loan, assuming that it is almost certainly way upside down, by trading it in you are presenting your credit union with a great big undigestable can of worms. Most likely, you are thousands of dollars underneath on the two cars.

    The coolest thing about the Chapter 7 and the brand new Kia/Hyundai route is you don't rollover the two bad beater loans into the new loan: You wont be chasing bad money with good money. Of course, with the new Kia/Hyundai, the second you drive it off the lot the thing probably depreciates $5,000, which is probably way less than the difference between what the beaters are worth in tradein versus what you owe on them.

    Your attorney has calculated these numbers. You are paying money for their advice. TAKE IT!
  • lotus29lotus29 Member Posts: 8
    Your attorney is probably being paid out of the Chapter 13 plan, so converting it to a Chapter 7 will mean that your attorney will make LESS money than if you stay stupid and proud and stay with the 13. So your attorney is both altruistic AND brilliant, a rare combination indeed!

    For the price of your upside down tradein rolled into the loan on the worn out Honda minivan, I would bet you would almost achieve the price of a brand new Kia/Hyundai minivan. With the Honda with 90,000 + K miles + the tradein on the upside down beater voyager, you will achieve fantastically high upside down numbers that will easily surpass driving a new Kia/Hyundai off the lot.

    In addition, the Honda dealer will try to sell you a Hondacare extended warranty for about $2 K, so factor that in as well.

    It is better to be upside down AFTER you buy than BEFORE.
  • kellidkellid Member Posts: 5
    My credit score is 630 and currently I only have the open Ch. 13 on there it opened in 2002. I am trying my credit union, but they won't talk to me until I have a letter from the Trustee.
  • rroyce10rroyce10 Member Posts: 9,332
    ....... Well ...... for starters, $12 is waaaaaaay too much $$ for a 00 Ody EX with 94k .. the dealer might have the $8/$8,5 figure in it .. then, lets say he dropped new rubber and finished all of the "k" service and it glows in the dark, it might hit the table in the loooow $9's, maybe ..... $10,5 would flat kill it on the retail side (if you're a brave Hiawatha) ....

    Put all that aside .... the problem is, the BK is filed under a 13 and a trustee runs the financial end of it until all listed debts are paid - and that can show-up for the next 5/7 years, no matter what the "books" say ...l.o.l....

    I'm not pickin' on ya, your probably a nice guy .. but I've probably seen 35,000 credit reports in my life and a 13 filing is like getting divorced from the same woman 13 times, but with more pain ..... but like some of the other posters have mentioned above, you need to get off the 13 stuff and just file a 7 and get it over with, because the new law goes into effect in about 6 weeks .. and after that, it's all going to look like a giant Chapter 13 thanks to our boy Lerner and MBNA ..... at least this way, you can be up and running in 6 months or less (properly done) ......

    Terry :shades:
  • ncmomncmom Member Posts: 22
    I'm probably too late to add my 2 cents, but wanted to support this quote:

    "For you, I'd recommend a new Vibe or Matrix -- tons of room in the back seat, honestly -- or perhaps a cheap Corolla. Similar money up front to the Ody, but they won't need anything but gas and oil while you pay them off. Maybe two- or three-year-old Vibe, those can be a great deal. "

    I don't know about the current sedans for sale now, so I can't recommend a particular model. I can tell you from personal experience that until your kids are in elementary school and involved in activities which make car pooling a big help, them you really don't need a minivan with two kids. We liked having a mid-sized sedan that let us reach the kids easily without the front passenger having to contort. Also, it was great to get those little parking spaces up close that the big cars couldn't fit in. We put roof racks on top for extra hauling space, and did just fine until my oldest (in 3rd grade) finally outgrew the back seat. Good luck to you!
  • kellidkellid Member Posts: 5
    Thanks, actually the Ody is listed for 10,500, my attorney is filing for 12,500 she w/ taxes and fees. If I could ditch my van and start driving something of my own tommorrow, I would, however I don't have that type of cash lying around, she said if I file 7 yet it would be all over, but it would take about 6 mos. to secure finances and get another car...I CAN'T GO SIX MONTHS W/OUT MY OWN CAR. My job depends on it. My M-in Law is being nice now w letting me use her car, but that could change tommorrow, then I am stuck w/ no way at all to transport not only my kids, but myself.

    This is all so very ugly, I have completely learned my lesson, which is why I have not been late on my rent not once, since filing.

    When I first filed I would have loved to have filed 7, but I would've given my van up, 13 was the only way to keep the vehicle, and once again I am in the same shape, I am depending on 13 to keep a car. The motion has been filed, I am now waiting on a court hearing to see what the trustee has to say. My next step will be to secure financing through my credit union. I will keep you all posted.
  • cadillacmikecadillacmike Member Posts: 543
    Anyone have any info on the impacts of the newly changed bankruptcy laws?
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    Hi cadillacmike. There are a number of articles out there on the new bankruptcy law and how it impacts consumers. Here is a link to one of the better ones: The new bankruptcy law and you - CNN/Money.

    Smart Shopper / Prices Paid Forums
  • rroyce10rroyce10 Member Posts: 9,332
    ...... Put all the smoke and mirrors aside .... it's like one giant Chapter 13 ...

    Mr. Lerner and MBNA sure made sure of this one .... I'm not much into the "BK" deal - and we do get about 7 to 9% BK's that are abusive ... ya know, like huge gambling debts .. 4 cars someone won't/can't pay for and having 8 credit cards pumped to the limits, and lets not forget folks that have refi'd their home 4/5 times in the 20/30 months .......

    That all said .. 90% of the folks are legit due to job loss, hurricanes, floods, medical needs and disasters, but they need "some" support ... the new law cuts their legs off before they can walk .......

  • nate77nate77 Member Posts: 2
    There is a certified 2005 camry le, with the option b pkg and 34000 miles, and all in all, they can get me to just over 15000, and between 7-11%. Is that good? Also, can I have them bring in another car from another dealership?

    I have had bankruptcy 2 years ago.

  • rroyce10rroyce10 Member Posts: 9,332
    ..... Has it been discharged ...?

    1.) You need to get online with "true credit/free credit (whatever).com and get a copy of your credit report and research it ....

    2.) You need to get with your bank or the local lender/Credit Union and see what they can do for you (if anything) ...

    3.) Unless you're putting down 50/60%+ down, I doubt you'll be seeing any 7/11% ...

    4.) Don't be buying any 35,000 mile vehicle that's been in the market for 15 months ...

  • grumpyoldmangrumpyoldman Member Posts: 3
    I have a Chapter 13 about to finish up, planning on purchasing a new Dodge 2006 RAM 2500 LARAMIE QUAD CAB 4X4 LWB:

    Configured MSRP: $43,681
    Printed On Thu Dec 1 22:52:23 EST 2005 From ZIP Code 98270
    Cash Down: $ 5000.0 Trade-in Value: $0 Amount Owing on Trade: $0
    Preferred Discount
    Finaced Amount est. $32,473 + Taxes etc.

    Would I stand better interest rate odds through dealer or pre-arrangment? Any idea want range?
  • rroyce10rroyce10 Member Posts: 9,332
    ... **I have a Chapter 13 about to finish up, planning on purchasing ....**

    It will all depend on the "about to finish up" thing .... most chapter 13's have a much longer shadow than a chapter 7 ..... have you checked your credit, how long has it been charged-off..?

  • grumpyoldmangrumpyoldman Member Posts: 3
    Ends this month...
  • rroyce10rroyce10 Member Posts: 9,332
    .... It's been filed, it just hasn't been charged off *yet* ... but it gets charged-off at the end of the month ....?

  • grumpyoldmangrumpyoldman Member Posts: 3
    Getting charged off EOM, then planning on the purchase with 5-7K down.
  • rroyce10rroyce10 Member Posts: 9,332
    ...... This should make you even more grumpy, so let me give you the bad news first ....

    For starters .. filing a 13 (especially now with the new laws) is going to be held by a trustee and your other bills have to be paid first .. and that means your credit report is going to look like a bad night in Baghdad ... and getting a $30/$40,000 vehicle is going to be kinda out of the question because everything else goes into a "freeze frame" until they are paid ......

    Your best bet is trying to get a $9,0/$10,0 vehicle and putting half down .. that said, once they see that big $$ down, your creditors will sniffin' around you like a Beagle lookin' for a bone ... "if" you can even get financed ..

    You need to scroll back and read the last 10/15 posts and get a better idea of what the deal is ..... you're filing a BK and you have $7 large to put down ...?!? ... whats up with that ..? .....

  • isellhondasisellhondas Member Posts: 20,341
    The same thing.

    Why would a recent BK feel the need to go overboard and buy a vehicle like that?
  • marikamarika Member Posts: 39
    I feel that many of these posts are incredibly valuable for their shock value and for the lessons to be learned. Some people may benefit tremendously from reading these scenarios.

    If I were in a similar situation and I absolutely had to buy a car, I would not consider anything more than a very basic used car with rock bottom total costs (not just up front costs). I searched through the Edmunds TCO database for the oldest data year (2001) and these are the winners:

    first fig is cost per mile, and second is 5 year TCO

    daewoo lanos $.26, $19.5K
    hyundai accent$.26 $19.4K
    suzuki swift $0.24 $17.9K
    toyota echo $0.29 $21.7K
    chevy prizm $0.28 $20.7K

    The most basic 2001 corolla, sentra, civic, escort, and focus are all significantly more expensive than these

    I searched this board and found two mentions of the Prizm (which would be my first choice) and virtually none of the others with costs listed. Meanwhile, most of the people who are planning on buying (or already bought) did not make choices anywhere near 2001 Prizm (or below) level. They have much more luxe tastes, apparently.

    The mind reels!
  • lemkolemko Member Posts: 15,261
    ...I'd just have a very solid older car that was long since paid for and meticulously maintain it. I'd also want one that was basic enough that I could do my own repairs. I think a lot of posters are seeking our approval to justify a big purchase despite having recently emerged from bankruptcy.
  • isellhondasisellhondas Member Posts: 20,341
    That would make too much sense.

    I deal with this almost everyday. The people with money, pay cash. They don't buy the top of the line cars. They don't HAVE to have a sunroof, leather etc.

    They settle for and are happy with the LX model.

    They have the 800 beacon scores.
  • allfiredupallfiredup Member Posts: 736
    I haven't actually filed bankruptcy, but about six years ago I intended to. I stopped paying some of my debts and my car was reposessed. It was the result of some very irresponsible decisions in my early 20s.

    I'm buying a new car for the first time in almost ten years. The vehicles I've driven since my repo have been purchased with cash.

    I've had my share of credit problems, but have worked very hard over the last 18 months to clear up as much as I can. I've managed to get my credit score from 522 in 6/04 to 604 as of yesterday. I was quoted 19% interest on a new Mazda3. The payment on that worked out to $431 for 72 months, with $1000 down. I told them I wouldn't be buying that vehicle at those payments.

    I can afford payments around $400, but obviously I don't want to pay any more than I must. With a credit score of 604, three credit cards in good standing and I've had the same job for 2.5 years, is 19% the best I can expect?

    If that is the best rate, I'm going to just bite the bullet and take it. Maybe in a year or so I could re-fi at a lower rate?

    Any input will be appreciated.
  • marikamarika Member Posts: 39
    Here are some numbers for you to chew on at 18% interest.

    Assuming you put $1K down. Suppose you bought an older, more basic Mazda instead of a new 3:

    2001 dx protégé
    (will be around $6600)
    Loan Balance: $5,600.00
    Loan Interest Rate: 18.00%
    Loan Term: 3 years
    Minimum Payment: $0.00

    Monthly Loan Payment: $202.45
    Number of Payments: 36

    Cumulative Payments: $7,288.36
    Total Interest Paid: $1,688.36


    Here are the estimated numbers for $1K down on a basic new 3:

    Loan Balance: $15,600.00
    Loan Interest Rate: 18.00%
    Loan Term: 6 years
    Minimum Payment: $0.00

    Monthly Loan Payment: $355.80
    Number of Payments: 72

    Cumulative Payments: $25,617.80
    Total Interest Paid: $10,017.80


    Personally, I would not do either but stick with the beater/cash situation. FWIW I haven't bought a car (new OR used) since 1988.

    Just because a lender says you are able to afford payments around $400/mo does not mean that it is a wise financial move for you. What if you should lose your job, get sick, have a baby, want to buy a house, or whatever? How much more will your credit be wrecked if some problem comes up during your 72 month $400+ loan payment? Or 35 month 200+ loan payment, for that matter.

    If you ask me, loans really suck. I'd rather do almost anything to avoid borrowing money, especially if I'd had some previous close calls or worse. I guess I don't have the same level of intestinal fortitude that some other posters have, because I usually visualize the worst possible outcome before I sign and that keeps me from getting into trouble.
  • steine13steine13 Member Posts: 2,789
    I disagree that loans "suck"... quite au contraire, having credit is wonderful.

    But I do think that a new car at 19% or so is not a good idea... much better to buy a decent used car ('02 Taurus?) with some cash down and then take out a loan and pay it back faithfully.. this should do wonders for the numbers.

    Even if you have the cash, take out the loan. A $4k loan at 20% is an investment in a bad-credit situation.

    FWIW, I hate being in debt, too, but I don't think it's a bad thing. Just uncomfortable. In many situations, a new Civic/Corolla/... is a good investment if it keeps your head clear for other stuff. Like job or grad school or family.

  • allfiredupallfiredup Member Posts: 736
    It is going to be an adjustment having a car payment after not having one for so long. The positive aspect is that it will do wonders for my credit score if I pay on time. Hopefully, in one to two years I'll qualify for better rates. I'm using that rationale (of refinancing down the road) to help justify the 19% rate now.

    I've also decided that I will only finance for 60 months, 72 months is ridiculous. The payment on $16,000 would be $415 for 60 months or $374 for 72 months, only a $40 difference. The total of payments oomes to $24,900 over 60 months ($8900 in interest) vs. $26,900 over 72 months ($10,900 in interest).

    I have considered a used car, but I don't want a situation where I'm making car payments AND having repair costs. A warranty is one reason I want a new car.

    I've also thought about getting a less expensive new car. After calculating the payments, it doesn't make a huge difference. For example, a Kia Spectra would cost $340 per month. Why not pay another $75 and get a much more satisfying automobile?

    As I said before, I CAN afford the payments at 19%. I just want to make sure there isn't anything better than that rate available to me. Unfortunately, it doesn't seem like there is.

    One more question- Is it realistic to expect that I could refinance at a much lower rate in 12-18 months? Even a drop to 14% would lower the payment by $43 per month.
This discussion has been closed.