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Bankruptcy and Vehicle Financing

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Comments

  • fezofezo Manahawkin, NJPosts: 10,376
    "GUESS WHAT I WILL NOT PAY A DIME AND YOU WILL SUFFER WITH THE HIGHER INTEREST RATES>>>> AND I WILL FILE AGAIN AND AGAIN SO KISS IT! "

    Not to get involve din this but you won't file again for even years. That's how it works.

    Been there and done that on getting in over my head - paid off the bulk of it and make very steady reliable payments on the rest. Last I looked my Beacon score was 760 and absolutely everyone offers me the best rate they have. Paying 5.9% on an 00 Accord bought new in December of 99 - $309 a month with a $5,000 trade in down payment.

    I agree with a great deal of what whale, cliffy, hicaira and others have been saying even if I'd take a different tone to it. Basically if you bite the bullet and steadily reduce the debt it will indeed suck for several years but you'll coe out smelling like a rose. What you are proposing will likely lead to a repetitive pattern that will haunt you for decades. I really urge you to reconsider.

    Please do keep us posted on what you do and what you are finding are the benefits and consequences even if it turns out differently than you expected. It would be a valuable educational experience for everyone.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • mazdaprofourmazdaprofour Posts: 202
    Fezo, to date you have been the nicest person on this topic. I do agree with you. I have learned my lesson and am not planning or repeating this event. I had perfect credit till I got married. Oce married, the bills started pilling up. The wife had to have some dental work done, followed by trips back and forth to see her parents and on top of that the cost of the wedding. It has been hard. I am not a selfish person so all that I did was for her. She is a good women, but I let the dreams and wants and needs get mixed up. So now here I am with a lot of debt. Like I said my job is good but for now. They have already laid off 1,000 and it is going to get worst. I only wish that I could pay back what I rang up but the whole thing has been very hard. I also could not get help when I asked for it. If the credit card companies had worked with me I would be in good shape. But I am not. I may be taking the easy way out, but it is the only thing I can do in my current situation. If the economy was good and I did not fear a layoff, I would not do this. What I fear the most is getting laid off once the new bankruptcy laws pass. It would be a lot worst than what I have to face for the next five years. I will not get any more credit cards. If I do not have the cash, I am not buying it. I only need a new car do to the fact that I drive 50+ miles a day. I also am about to open a photography business and will need a reliable car to make it to weddings and photo shoots on time.
    I also have a few credit cards with my dad that are joint. He had to use them when his retna tore and he needed a surgery. He was out of work for 5 months. At that time he also tore a ligament in his knee. That also cost a lot to fix. Since he maxed out the cards and had no choice, he had to also file a bankruptcy a few months ago. SO guess what? they are trying to collect from me. So all and all it is not a good thing right now. I really do need some time without these bills so that I can get my life back on track. All jokes aside, I do understand why somepeople get mad at people that do not repay, but what a persons intentions are matters most. I do joke around but inside it hurts to see my perfect credit go down the drain. It will take time to reapir this but I will. Thanks
  • fezofezo Manahawkin, NJPosts: 10,376
    I suspectthat you will see a whole change in tone from the other posters at this point - they may even have some advice now tat you've come clean about, for lack of a better phrase, not being a jerk.

    I do urge you if at all possible to keep on the payment bandwagon. Working from fear is an invitation for disaster. Do see if there's a consolidation option out there. Someone earlier mentioned an honest debt consolidation outfit. Check it out. Yes, there are sharks out there but there are decent folks trying to get help you get yourself back on your feet.

    What you did for your father is commendible but you can see where it got everyone - he had to declare bankruptcy and because you attched your name to some of his debt they are coming after you. Try to stop the cycle. When some of the creditors (perhaps with the intervention of a debt consolidator) realize that their options are either working with you or blowing off the whole debt they may well change their tune. These guys love a regular payer.

    I agree with you that there are some real sharks out there aiming at you - duck their aim and get real help. I can't speak for the lawyers you've consulted. There are certainly enough of them that will prey on folks in your situation so be very, very careful. Guess who is the first guy to get paid in full in this situation? Right on teh first guess! It's the lawyer. Be very careful. There is a way out of this. It will take a long time but you will come out of this with a better credit rating and what's more you'll be a better man for it (trust me on that one) with more respect both for others and yourself.

    Best of luck and keep us posted.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • fezofezo Manahawkin, NJPosts: 10,376
    After that last post I checked my E-mail - got one from some clown trying to get me to refinance my house to consolidate debt! So here's the word - never do business with someone who just got your name off of a mailing list! No way no how! That's a shark warning....

    BTW - no matter how tough it sounds, cut up and destroy any credit cards now! It's a tough road but the only road out! And when you are back on your feet - avoid Discover - highest rates I've seen.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • mazdaprofourmazdaprofour Posts: 202
    well the car had to go so it is gone. I do suspect that they will come after me for the loan once the car is auctioned. The loan has a balance of 20,000 while the value kbb is only around 10-11. So it had to go. I turned in the keys today. Since I have to file for chapter 7 on the car, I will have to do the same on the credit cards. They are way too much. I owe around 22 thousand (counting the debt with my father). So we are talking 42,000 total. A very scary balance indeed. I will file my bankruptcy but will only pay cash from now on. NO MORE CARDS!. I do have to buy a car so I will need my discharge letter first. I know that I can get a loan for around 10-13k after the bankruptcy with 23% interest rate but do you think that carsdirect.com will approve a loan for me the same way as a dealer could. I would imagine so but the dealer may have more banks to work with. What you think?
  • fezofezo Manahawkin, NJPosts: 10,376
    I'm not in either the car business or the money business at all. I'm just a guy who caught what you were up against and am looking at it the best way I can. Here's my first theory and see if it flies -

    Forget a new car. I don't know about carsdirect financing so I can't help there. The other guys actually had a good idea. Got $2K? Buy a $2K car. Yeah, it's not as much fun and such but an old Civic or such with 150,000 miles on it may well be as reliable as a new Kia and you will own it outright. You will never be caught in an upside down loan here! If your wife has separate money and can sweeten the pot a little so much the better but $2K can indeed buy you a doable car. Pay a mechanic to check it out and replace the timing belt unless you have a documented receipt showing it has been done recently. You'll find both the best and worst deals from someone just selling their car in the paper. My own observation is that used Nissans go for a bit less than the comparable Honda or Toyota and still do pretty well - bu that's just me.

    BTW - if those cards with you jointly with your dad still exist kill them. Right now yo have to take care of yourself and indeed you have another person you owe things to in that wife of yours. Sounds like a good woman and she's with you on this. She comes before your dad as difficult as that may be to hear.

    I probably won't be back in tonight but I'll check in here so try to be OK - OK? The advice the other guys were giving you was actually good advice. Don't shoot the messanger.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • mazdaprofourmazdaprofour Posts: 202
    I do actually have a used car. It is a 1993 mercury sable that I bought for 2,000. It has about 130,000 miles on it. So far no major problems but it makes a noise when I go over bumps. I had mechanics look at it buy they could not tell what it is. I was planning on selling this car and using it as a down payment on a kia rio or something under 13,000. Even with a worst case financing we are taking under 300 a month. I was paying 430.00 a month for the mazda. I think the mercury will run for a year but not sure. I guess I could pay 150.00 to get the timing belt replaced but I think that is ok. The car has 130,000 on it so I would say that it has already been replaced (just guessing). Eventuly I will need to buy a new car ( do to all the miles I drive). Soooo confused.
  • mjday1972mjday1972 Posts: 76
    How do you owe $20,000 on a $16,000 car?

    Also, don't you think a bankruptcy court is going to have a hard time approving your bankruptcy given you still have a job?
  • fezofezo Manahawkin, NJPosts: 10,376
    Yeah, and therein is the rub. Decisions made out of confusion may compound the problem. That Sable is a touch call. First off - it probably doesn't have a timing belt so no worry there. The Japanese are the ones in love with timing belts. They aren't actually a bad idea but they are devastating if you let one go.

    That said I will admit to my vehicle prejudice up front and tell you I'm not a big fan of Ford and would be wary of a Sable with that many miles. The only way you'll get $2,000 for it is trading it in but that doesn't make that a good idea. I still think a Toyota-Honda-Nissan with more miles is the better bet if you can indeed get the $2,000. Heck, almost anything that runs will get you maybe $1,500 so a private sale on the Sable might be doable. I'm kind of playing with this one so bear with me here. Even I will admit that the Sable is indeed a car with no negative equity right now - it's better than nothing. A great deal better than nothing. Tuck the $300 a month aside in a savings account and before any time at all you'll have over $1,000 and growing so that if the Sable hits a major repair (say a tranny rebuild which might set you back $1,800 - it what I paid to rebuild a Windstall tranny - it's probably the same tranny). But I'm off my point. At $300 a month in 6 months you would have enough to rebuild that transmission if you needed to and pay cash doing it - and again - no debt on the car! It ain't pretty but you'll get breathing room. Ya know the more I think about it the more that sounds like a decent idea to get you through. Trust me - I'm not noramally one to advise people to hang onto Ford products but this may well be an exception.

    My very uneducated guess is your clunk is a front end problem or worn out shocks. If it makes its way through state inspections and you can live with it you MAY want to ride this out for a bit. Having the mechanic say they can't find it should mean that they've checked for the dangerous stuff.

    Here's why I'm trying to steer you away from a new Kia or something like that. One - it puts you right back into borrowing money you can ill afford to borrow. Two - you IMMEDIATELY return to negative equity on the car. Before you've even driven a Kia with $2.000 down and the best possible deal off the lot it is already worth less than your payoff. Very dangerous.

    Here's a suggestion. One of the best, most honest car guys in this place (I'll be nice and steer you away from the ones you've locked horns with, even though cliffy and isellhondas are really decent folk) is brentwoodvolvo. Despite the name he doesn't sell Volvos anymore but he gives very good advice and is one of the most knowledgable car guys I know. I'm not spilling any secrets when I give you his E-mail address because it's in his profile here. The address is [email protected] Tell him fezo sent you and do not - repeat - DO NOT cop an attitude with him and he will give yo far better actual car advice than I could ever hope to. Explain your situation just liek you did in your first couple of posts to me. Heck, cut and paste them if that helps. Ask nice and he'll tell you all he knows. Don't let him sell you a Vauxhall (sorry - private joke - he collects them).

    I do commend you for being very upfront about why a Kia. There are those who praise them to the hilt when indeed they are a cheap starter car that needs that long warranty.

    Keep going like you are now. Don't panic and you'll be OK. While I haven't been in EXACTLY your situation I still know the basic problem well. There is indeed light at the end of the tunnel, but you have to deal with the fact that it's a long tunnel.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • oldharryoldharry Posts: 413
    If that noise is a knocking sound on bumps like hitting something fairly heavy with a hammer, it is sway bar links. Taurus/Sable cars use a link with two ball sockets, and they klunck badly when worn. They cost about $40 each plus labor, but while annoying aren't dangerous.

    Harry
  • oldharryoldharry Posts: 413
    My daughter got sick in January of 1990. That year the state tore up the highway in front of my shop, and customer's stayed away in droves. The state said, people - could - still get to your business, so you could stay open, you are not ellegible for compensation. My net income that year was below what I would have made at a minimum wage job for the hours I put in..

    My daughter was ill for seven years before she died, and I paid a lot of money out of pocket. I paid all my bills, however, by extending mortgages driving the same cars for years. The only vehicle I aquired during those seven years was an old Dodge van to put a wheel chair lift in for Carolyn, and her wheel chair. Carolyn's power wheel chair is still the most expensive vehicle I have ever purchased.

    Now that she has been gone almost six years, my finances are looking up, and my FICO credit scores are even higher than Steve's.
  • Waaaah! Get over yourself. You're not the only person in his or her mid-late 20's who has a lot of debt to pay for.

    Guess what? I paid for my own wedding, too. I have over $27k in student loans as of today (used to be a lot more, but I've been paying on it for 4 years). Yeah, it sucks, but I took out the $, so I'll pay it back. Looks like you're a chip off the old block, though. Dad's stiffing you so you don't mind stiffing Discover, huh?

    Have fun getting another job if you get fired from this one with a BK on your credit. Employers have every right to run your credit before hiring you and can even make a good credit check part of your terms of employment. I had to have my credit checked before I got my job. I would not have gotten the job if I had a BK on my credit report. Don't believe me? Call a lawyer (a good one, not the one with the screamer ads in the yellow pages you've been using so far).

    Better hope you don't get fired...
  • Is that you'll likely not be able to file BK again after this time. Eleven years and tougher BK laws next time around? Nope. Not gonna happen.

    I'd like to be a fly on the wall when you're trying to get approved to buy a car or a house or an ATV, or anything else that requires a credit check, though. It would be nice to watch you squirm for a while.
  • wishnhigh1wishnhigh1 Posts: 363
    Buy an used kia or hyundai. Those things drop value rapidly when purchased new. If you buy used, you let someone else take the depreciation hit, so you dont have that horrible negative equity, and then you still have a car with a full warranty for a good 8 years or so.
  • alfoxalfox Posts: 716
    is admiting you've got one. You came in kinda hard and cold, mazda, and we all took your attitude at face value. But maybe there is a person under there after all...

    Some serious recommendations:

    1. Bankruptcy is teh wrong road. It is NOT the easy way out, but rather an absolute last ditch resort. They will likely not wipe your slate clean, especiallyt if you are working. You'll just get a court-imposed payment schedule, and no credit. Lenders might agree to give you money, but the court and current creditors will not let you have it. Everything the court will do you can do yourself without ruining your credit! Get another job, set up a payment schedule, and cut the credit cards. If creditors sue you for money, fine - they will work with you then.

    2. Forget the new car. Even making repairs on the Sable is cheaper than a $350 car payment. Set a few bucks aside each month that would have been a car payment for repairs.

    3. Look in the mirror, take a deep breath, lose the 'tude and tell yourself you are OK, and you can do this. YOU are your best way out - get on your horse, trust yourself, and solve the problem without giving in to the vultures!

    4. Stop arguing with total strangers on the Internet and get some qualified help. All we are doing is frustrating each other, and we're probably all nicer people than this!

    :^)
  • mazdaprofourmazdaprofour Posts: 202
    I will try to hang in with the sable. I am not trying to do any harm to anyone. I will ignore all the rude comments by hungrywhale and concentrate on the good points. Thanks for the good advice guys. Fezo, thanks for the e-mail link. I will e-mail him asap.
  • alfoxalfox Posts: 716
    Actually, whale's a good guy who was reacting to your attitude, as was I. Give him an inch, and he'd probably help you out. Good luck.

    Al
  • saturnfansaturnfan Posts: 40
    Oldharry, you truly are a good man, and I hope the Lord will reward you in ways only He can do.

    Mazda,

    After turning in the car, you have most likely passed the "point of no return" and are committed to the Chapter 7 bankruptcy. When the car's sold at auction, there will be a large deficiency, and the financing agency will come after you for it.

    Be sure to list all of your debts when filing the petition. If you leave any off, you'll still owe them.

    The first meeting of a creditors will most likely be a 5 minute formality. The trustee, not the judge, will ask you if your schedules are correct. In most cases, creditors won't show up.

    The only time they appear is to try to get you to reaffirm your debt to keep the items owed (Sears was big on this) or to claim your debt is incurred because of fraud and shouldn't be discharged. Very rare, but do not charge anything in the 3 (I think) months before you file.

    I make no moral judgments about you since I've made many even more serious mistakes in my life for which I hope my repentence to the Lord has secured for me His forgiveness.

    The credit card companies don't help much by pushing credit at people and constantly upping credit limits w/o being asked. Once you get trapped, it's hard to get out but can be done.

    The important thing for you, Mazda, IMHO is to learn from your poor choices so you won't repeat them in the future. Your Beacon will come back partially when the non-bankruptcy items clear in 7 years. Fully, when the Chapter 7 drops after 10 years.

    Bankruptcy is based on the Biblical principal of forgiving debts every 7 years and is very fair to those who've had financial reverses. Yes, it can be abused, but is vital today for people who are hit with unemployment and enormous uninsured medical bills.

    Be sure to get a good lawyer, not a bankruptcy mill.

    Best wishes to you, my friend.
  • mazdaprofourmazdaprofour Posts: 202
    Saturnfan, thank you for understanding. Too many times, people want to just come out fighting and accusing. Everyone has made mistakes. Mine where some my fault and some beyond my control. I am not a greedy or bad man. I treat people with respect and have been told that I am too nice. I am sorry to anyone that I offended. I do not mean to be rude, but I am under stress and have a short fuse. I have a freind that told me the same thing about SEARS. She said that sears has lawyers that stay at the court house all day just going to hearings. Thank god I do not have anything to do with them. As for listing the stuff, I have heard that you just need to list the name of the financial bank and you do not have to have the account number or mailing address. Is this ture.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    When I clicked on your username and saw you stated your name as John Donuthead, I figured you were another troll. Some of us have been "had" before...big time. Anyone remember whimsey?

    Your original cavalier attitude is what turned us off. you asked for help and then became combative when well meaning folks tried to help.

    That said...Yep, that voluntary repo of the Mazda has probably pushed you to the point of no return. Baby the hell out of that Sable and it may run for awhile.

    I do wish you well.
  • alfoxalfox Posts: 716
    He had a Mazda...

    {ba da bing!]

    /;^)
  • mazdaprofourmazdaprofour Posts: 202
    lol...that is funny. SORRY ALL
  • fezofezo Manahawkin, NJPosts: 10,376
    Good advice going around - heck, Harry even gave you the likely fix on the Sable. He's a good man - good of you to notice.

    I don't know if I completely agree on the repo of the Mazda getting you past the point of no return but they might be right. In one way it doesn't matter - you have to get those debts paid off anyway. Yeah, yo may have srewed your dredit longer but the long term answer is still the same - get yourself out of the dumpster once once out stay out. If it takes you 10 years guess what? 35 ain't old. I'll grant you that when I was 25 I didn't think that way but trust me on this.

    Please, please - force yourself to put that $300 a month into a savings account. You'll likely need some along the way and you DO NOT want to be borrowing to get it.

    I'm just upset that Harry has a higher FICA score than I do......
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    Last time I looked, I was 806.

    Seriously, there are good folks here with sound advise.
  • I'll agree to be nicer, but I meant most of what I said. I do think many people in this country (and you, in particular) seem to have a hard time accepting responsibility for their actions. You can either act like a victim your whole life or dig yourself out of a difficult hole and get on with your life. Yes, your dad screwed you out of some money. I'm sorry that happened, but he didn't make you charge up the stuff for the wedding. He didn't make you buy the car. He didn't make you charge up all the other debts.

    I think what irritates me the most is that you never even tried CCCS or debt consolidation. You called your creditors, they wouldn't back down, so you're filing BK and that's that. Had you attempted to pull yourself out and just couldn't do it, that would be a whole different set of circumstances. Like I said, I don't begrudge anyone who HAS to file BK. For most people, it's not something they would do unless it was their absolute last option. You, OTOH, seem to relish filing and seem almost happy about it.

    And you very well may have one heck of a hard time getting another job with a BK on your credit. I wasn't kidding about that.

    Have a nice life.
  • mazdaprofourmazdaprofour Posts: 202
    NO COMMENT
  • I tried to be more reasonable and that's your response? I've got one question for you:

    Why didn't you even give CCCS or debt consolidation a chance?
  • black_tulipblack_tulip Posts: 438
    I think you resorted to bankruptcy too soon. All those things you are blaming your bankruptcy on, can happen again, and may be accompanied with, as you say, a worsening economy. Except this time, if the going gets truly rough, you will not have the shelter of bankruptcy. Flame me if you will, but I think you did not try hard enough. Good luck with whatever you choose to do!
  • saturnfansaturnfan Posts: 40
    Yes, Mazda, been there, done that and a lot more, so I'm surely not the one to "cast the first stone".

    Regarding your question, I hope you will use an attorney. You can go in pro se (by yourself) for just the filing fee, but you may not know how to proceed if problems like a creditor protest arise.

    Your attorney will give you worksheets to fill in. For each creditor, you must supply the address and account number since the court will mail a "Notice of First Meeting of Creditors" to them. This should be available on your bills - give them the address where questions, not payments, should be sent.

    Regarding the amount, try to estimate on the high side. You need not be exact. Your attorney will know how to handle "executory" items such as the repo where you presently do not know how much you will owe.

    You may also reject leases or contracts for continuing services if you wish.

    Please use a good attorney for your own protection. Might cost you $1K (court fees alone are $200). Weird, huh, you need a grand to go broke?

    So, onward through life for you, and may your next steps be in the right direction.
  • mazdaprofourmazdaprofour Posts: 202
    Saturn fan, I asked my dad. No his, they just listed mostly the names of the bank. Some had account numbers and some did not. He said as long as you put the name down, it covers the account and also any other accounts you have with that bank. I will hire a attorney. The fees so far are in the 700-800 range. I am going to one on friday. Big and famous lawfirm. I will see how things go. I would not dream of representing myself. It is always better to have a lawyer.
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