Bankruptcy and Vehicle Financing

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Comments

  • mazdaprofourmazdaprofour Member Posts: 202
    Joe2617, tell me how it works? Cause you do just walk in and have a 5 minute hearing with a trustee. Only standard questions asked and no moral issues involved. Thanks.
  • mazdaprofourmazdaprofour Member Posts: 202
    well I do not own a home, do not have any money saved up, no 401k no pending lawsuits and nothing else that has any cash value. The process itself is not hard. The time spent reparing the credit is hard and long.
  • claywaterfillclaywaterfill Member Posts: 534
    It won't take long, but there will be a list of questions. He will want to know if you have equity in life insurance. They will ask many questions--there is always the chance he won't sign it if he does't like your answers. He won't get into any morals or anything, though. He'll ask his questions and then move on to the next guy.
  • mazdaprofourmazdaprofour Member Posts: 202
    unless you lie and are caught or hide assets, you are almost garunteed it. I have yet to hear of one person that got turned down. Even in a worst case situation, some assets might be sold to pay backl debt. In my case, nothing to be sold.
  • joe2617joe2617 Member Posts: 88
    Nobody said there were moral issues. I'm a finance manager at a dealership and I have seen many bks dismissed. If you earn 100k a year and have debts of 50k do you really think you can just write the debt off? If you have the ability to pay, they won't let you file or you can file chapter 13 which is really just a re-structuring. You make payments for 3 years then it's dis-charged. If they let you file a chap 7 then file. It's the quickest way to a fresh start. Most banks would rather see a discharged bk then omeone on the verge of a bk.
  • mazdaprofourmazdaprofour Member Posts: 202
    agreed but it all again depends on income vs debt.
  • afk_xafk_x Member Posts: 393
    I can't believe all these "moral" people. Give me a break! Companies that extend credit are taking a risk. They collect interest and they are for profit companies. Looks like in this case they made a bad lending decision. Take a good look at Providian. Morals???

    Some common myths dispelled - a high rate of default on loans will not make it more difficult for good credit people to get good rates. Consumer credit counseling can be a good idea but in many cases a BK is a MUCH better choice. By the way CCC is a non profit organization funded by......credit card companies.

    Back on topic - approval after BK isn't too tough as long as you go in understanding you WILL pay a high rate, have a good down payment, and solid income. I just did a deal where the customer had a BK discharged in December - had only one minor credit card for reestablishment - and with 1500 down got them 18.95% on a used car - 12.95 on a new car.
  • jb_thecserjb_thecser Member Posts: 24
    Deadbeats most certainly DO drive up the costs of doing business for all of us.
  • lancerfixerlancerfixer Member Posts: 1,284
    Out of curiousity, could you expand on your statement about BK sometimes being a better choice than CCC? I was always under the impression that a BK was the absolute worst thing you could do for your credit rating.
  • alfoxalfox Member Posts: 708
    an absolute last resort. Not so?

    'Course my thinking is on a moral basis, and you said to leave that all aside. So I guess if we agree that morals don't count we can stiff the creditors, right? Why not just look up their CEOs and paint 4 letter words in their front yards with fertilizer? Or key their cars? Morals don't count, right?
  • andre1969andre1969 Member Posts: 25,259
    Some other credit counseling agencies may be different, but when I went on CCCS, they only dealt with credit card debt. They couldn't help with car loans, student loans, mortgages, utilities, etc.

    I guess if most of your debt is on credit cards, they're the best way to go, but once you start spilling over into those other areas, well, depending on how badly you spill, a BK might be a better alternative.

    In my case, that $27,000 was all on credit cards. The mortgage was up to date. The Dart was probably paid off by its first owner around the time I was born. All the utilities were paid in full, etc. So in my case CCCS helped out tremendously.
  • afk_xafk_x Member Posts: 393
    Please...spare me the poor analogies of vandalism compared to BK.

    CCCS will destroy your credit while you are repaying the debt. You are unable to do anything. A BK will just make you pay higher rates for a while - and with proper reestablishment you can get your FICO score up in the low 600's in only a couple years, high 600's in 4-5 years - and 700 score 6-7 years down the road.

    Lets take a person with 30,000 in credit card debt that has 60,000 a year household income. Minimum payments are about 650 a month. If they go to CCCS they may be able to reduce the payments to 500 a month and have the person out of debt in 5 years. Or he could go BK and take the 500 a month and save it.

    Lets assume this person has a goal to buy a home in 5 years. Which one will be better off? The guy with a BK and 30,000+ to use as a down payment or the guy who struggled to pay off the credit card companies because it was the "right" thing to do?
  • afk_xafk_x Member Posts: 393
    I have yet to see someone who could demonstrate how the current levels of BK (highest ever!)cause good credit people to pay higher rates.

    Competition prevents this from happening folks. Its propoganda that all these BK's make rates higher for good credit people. The creditors are trying to make it more difficult to go BK, and spreading this crap so good credit people will help get these laws passed.

    It simply ISNT true! The creditors are enjoying massive profits and the most profitable customer is the one who is paying 25% interest and will eventually go BK. Wake up folks! Sears is a perfect example. They make 5 times the profit on 1/4 the revenue on their credit side than their retail side.
  • mney6mney6 Member Posts: 116
    If a person has 30000 in credit card debt,he/or she doesn't have any self disapline.
    There is no way in heck that they will EVER save 500 a month.
    I have seen enough of these people for over ten years in lending.
    Granted 10 % of these people have a legit excuse to go BK.
  • jb_thecserjb_thecser Member Posts: 24
    I think you need to get real. Like mney said, most people (mazda included, apparently) will go right back in the hole after BK if creditors let them. They aren't going to save that $500 a month. Mazda said he can save $700 a month after he files BK. Anyone wanna bet that he'll do it? I'd bet against it and I'd give odds. Because, like mney said, he has no self-discipline. Maybe for a month or two he'll do it, and then there will be something (like a new car) that he just HAS to have, and you can say bye-bye to the savings. Then he'll get another credit card and before you know it, he's wondering how he got himself in this situation all over again. Hopefully, by then the BK laws will be much tougher and he'll actually have to pay off his debts instead of buying things he can't afford and then saying "It's Discover's fault!"

    Until creditors stop issuing credit and car loans to folks straight out of BK, this won't stop. There should be some kind of required waiting period (1-2 years, maybe) before anyone is allowed to give credit to someone who files BK. Is it fair or easy? I don't care. BK isn't supposed to be easy. It's supposed to be a last resort.
  • afk_xafk_x Member Posts: 393
    I'll posture my point differently. Tell me why it should be tougher than it is now for a person to go BK?
  • afk_xafk_x Member Posts: 393
    What does your point about him not saving the money like he could have to do with anything? Of course he probably won't save the money.

    My point is twofold.

    1. Going BK isnt "wrong" or immoral.

    2. Getting credit after BK isn't tough and in many cases easier than someone who is way overextended.
  • jb_thecserjb_thecser Member Posts: 24
    So people can't do exactly what Mazda's doing - run up big CC charges, decide you don't want to pay for them and file BK to get rid of them, then repeat.

    BK should be a last resort, not an 'easy-out'.

    Sometimes, BK is most certainly immoral, most of the time, it's not. Filing because you just don't want to pay is definitely immoral in my book. You ran up the charges, you need to pay them.

    Him not saving money directly relates to why it shouldn't be so easy to file bankruptcy. If he starts the cycle all over again, I'd say the odds are pretty good he'll end up there again.
  • joe2617joe2617 Member Posts: 88
    The reason it's easier to get an auto loan after the BK is because of the bk laws. You can't file another bk for several years. Which means they can't write that debt off. Also nobody has mentioned the lawyers roll in the amount of bks filed. I've seen 19 year olds who filed on lawyers advice and only had a couple 1000 in credit card bills. One last thing, anyone who blames the credit card companies is full of &*^#.
  • lleroilleroi Member Posts: 112
    Credit card companies love "credit challenged"people.Think about it 3 to 4 times the normal rate for high risk loans.And if they also tack on some of these costs to good payers -that just makes it sweeter.He also also right about the overwhelmed cccs client vs the recent BK filer.Who has the better ability to pay?

    Financial institutions like banks,finance companies,loan sharks,etc all make money off the "higher return"investments.Like all portfolios they include sure thing low return loans and a certain %of high risk -high return loans.Like insurance rates the risky drivers should not increase the rates of the safe drivers.If it does then something is really rotten here.The high risk is charged more to cover his "riskiness"and then the low risks are made to pay too?If this truly is the case-how dumb are we?

    All the crying that is done here by new car salesman/dealers whatever about the low profit margins-they need these 12% to 24% customers.These are the people that can be bullied into all the "extras".I see most car ads promoting their ability to finance people with credit problems.

    If a BK increases MAZDAS discretionary income by $500 to $700 a month car dealers want him bad.Does the Ford drealer care if his Chevy was turned in ?Not if he is freed of the debt.Heck,in his case the same dealer who repoed his car wants to talk to him once his BK is done.
  • grbeckgrbeck Member Posts: 2,358
    If credit card companies love it when people file for bankruptcy, why are they leading the charge to toughen the bankruptcy laws? According to this scenario, it's more profitable for the credit card companies to let the borrower quickly file for bankruptcy and then charge higher fees and interest rates when the bankrupt borrower reapplies for credit. Why would they push for laws that not only make it HARDER for the person to file for bankruptcy, but also require the creditor make more of an effort to pay off his or her debts (presumably at the old, lower interest rates)? I would think that the credit card companies would want to liberalize bankruptcy laws!

    I'm always amused when people blame solicitation by credit card companies for the proliferation of bankruptcy cases. Every week I receive at least three offers of low-interest credit cards. What happens to them? They end up in the trash. This has been happening for years. And what happens to me? Nothing. Not once have the credit card secret police burst through my door, pistol-whipped me and forced me to sign up for a $10,000 line of credit with VISA or American Express. They never call my workplace and harass me, asking why I refuse to accept their fabulous offer. No close relatives have been kidnapped and held hostage until I sign up for another credit card. They haven't even slashed my tires as punishment for refusing their "terrific, no fee, low interest" offers. Anyone so weak that he or she can't simply throw an envelope in the trash shouldn't have a checking account, let alone a credit card.
  • lleroilleroi Member Posts: 112
    this"weak"person the credit card.Sounds like you are saying the credit card companies are asking for government assistance in controlling who they offer their cards to.Same with car dealers who advertise "bankruptcy no prob".

    They will call you at your work place when you take advantage of this wonderful offer and then can't pay though.This puts attorneys to work and allows them to pay their bills.Or maybe an individual should be able to demand more from his employer when he overspends.Nope,can't do that,only the government can.
  • andre1969andre1969 Member Posts: 25,259
    ...if they did, then why would they back CCCS and other credit counseling agencies? They'd rather get all their money back at a reduced interest rate, or even just the principal or a big chunk of it back, than have a person file bankruptcy and the credit card company lose it all.

    As for an example of how a bankruptcy drives up the costs for all of us? Well, check this out. About 2 years ago, the guy in the condo behind me filed for bankruptcy. He quit paying his mortgage, so the condo got forclosed upon. He also quit paying the electric bill and the condo fee. I've seen the condo's records...that sucker's on there for about $4,000 in back fees. There are 108 units in total in our community, so basically that guy ended up costing the remaining 107 of us about $37 each. Okay, that's not a big deal, but he's not the only one who's been forclosed upon, or fallen way behind in condo fees. It all adds up, and the rest of us get stuck with a condo fee that ends up going up, or the money gets pulled from reserves for landscaping, maintenenace, or somewhere else. That $4000 doesn't just magically go away!

    His condo ended up getting sold WAY below market, for about $68,000, which hurt the rest of us for resale value. I don't know how much he still owed on it, but he originally paid $86,000 for it back in '97, so he most likely still owed most of that. The mortgage company ended up taking a hit, but I'm sure they got that money back somewhere.

    The electric company, unfortunately, will not cut off your electricity until you've fallen behind on your payments for months, so that makes it real easy to run up a nice, big bill. Well, this guy had something like a $1000 electric bill, from what I've heard. Again, that money's not going to just disappear...the rest of us who pay our bills on time are subsidizing it!

    I think the main problem is that we're simply becoming a nation of weak-minded deadbeats, and the system is encouraging it. Somehow we've managed to convince ourselves that we're all entitled to that 40 acres and a mule, nevermind how it's going to get paid for! We're becoming too over-extended with credit, and for the most part, nobody gets any real training in how to use it and how it really works until it's too late. Back in the day, we didn't have 30 year mortgages, 84 month car payments, rent-to-own tires, and so on and so on. Heck, I have a cousin who actually has a FORTY year mortgage!! I didn't know there was even such a thing in the United States, although terms like that and even longer are common in Japan, where real estate prices are unbelievable. The early years on a 30-year are almost all interest anyway, so I don't see how a 40-year or longer is even beneficial.
  • afk_xafk_x Member Posts: 393
    4000 in back condo association fees? Even at an incredibly steep $200 a month it would take 20 months to rack up that kind of bill. Doesn't make sense.


    Same with a $1000 dollar electic bill.


    Your example is a good one where innocent people lose because of a deadbeat. However that doesn't mean that good credit people will have a tougher time getting the best rates.


    By thw way, obviously the creditors don't want people to go BK. Who said they did? Which thought process is more naive...saying its all the credit card compaines fault - or saying they share no part of the blame for the high levels of BK we're experiencing.


    Obviously the ultimate responsibility falls on the BK filer. The huge PROFITS of the credit card compaines suggest that they too get a peice of the blame as they have extended credit indiscriminately - even so far as to give large lines of credit to non working college students.


    You people need to quit grasping at straws at recognize that there are already laws on the books that prevent frivolous BK filings. Why don't you take a look at what Thomas Jefferson had to say.


    http://odur.let.rug.nl/~usa/P/tj3/writings/brf/jefl219.htm

  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    After reading these posts, I can see that there are people out there who think it's O.K. to go bankrupt and flake out on the bills that YOU ran up. I guess that's where today's value system has taken us?

    I guess I was brought up thinking that it was a horrible disgrace to file bankruptacy unless forced into it.

    Old fashioned values, perhaps...maybe I'm the guy who is wrong here?

    I am glad that we do have bankruptacy protection for people who, through no fault of their own run into health problems and other misfortune that find themselves with nowhere else to go.

    I'm also glad that the laws are getting stricter.

    Hopefully the unfortunate people who need it the most will still be able to have protection.

    ***off soapbox***
  • jb_thecserjb_thecser Member Posts: 24
    My thoughts exactly.

    afk - a $1,000 electric bill could be run up in just a few months pretty easily in a warm climate. Don't know about the condo fees.

    I also agree that lenders need to have more stringent guidelines about who they will give credit to. But they're only partially at fault. Like grbeck said, nobody's forcing people to take them up on their offers. While the CC companies shoulder *some* of the responsibility, the lion's share still lies with the person who runs up the big CC bills. The CC is given to them with the understanding that they will pay for the things they charge up. Some people have no intention of ever paying. It's akin to stealing in my book.
  • andre1969andre1969 Member Posts: 25,259
    We all pay a different fee, depending on the square footage of our unit, but it only varies by about $20-30. Right now, mine is about $168 a month. Right now that other unit might be about $150 a month, but in previous years it was less. So yup, he'd been running up the bill for a long, long time. Thing that pisses me off is that the condo association didn't step in sooner, but I've heard it was because the lawyer they were using was totally inneffectual. Come to think about it, so was the assocation back then! Thankfully, we've switched management groups for the association, and they're working on getting a lawyer that has a bit more bite than bark.

    As for the electric, I heard that this guy's water heater sprung a leak, which caused it to run non-stop, and he got a $500 bill one month, that he refused to pay. He was one of those types that's going to sue everybody, and to hear him talk he sounds like a bigshot. In our neighborhood, winters are what's killer when it comes to the electric bill. I have a heat pump that's only about 5 years old, but this other unit has an old central a/c, electric furnace that dates back to 1973, when the places were built! Sometimes I get a $200 bill or two in the winter, but then only a few $100 bills in the summer. It's not hard though, for some of these places to get a $300+ bill in the wintertime!

    I actually ran into the guy maybe less than a year ago. He works at an auto parts store now. Last time I saw him, he was still talking about "I'm gonna sue this person, I'm gonna sue that person" etc etc. Most likely, he's repeating his cycle.
  • lleroilleroi Member Posts: 112
    Mazda thinks a BK is a good thing.Heck,anytime you need a lawyer it's an indication something is amiss.I think that a times a BK is the best choice from a limited option list.Once an individual or a business reaches critical financial mass the morality or lack of is not a factor.This of course does not onclude criminal intent.

    YES some people handle money poorly or hang on to a stock too long.People who were born with the ability to handle money wisely are rewarded,without punishing those less fortunate.The younger people who get in financial jams ,hopefully learn from it.Mazda and others in similar positions are not living a life of luxury at the expense of the rest of us.

    The guy who lost his condo did not make out.The condo assoc made a bad decision letting his fees slide like that.There are car salesman in here that have written deals they knew "no way"would this work.Sometimes you just take a gamble-its better then letting inventory age.

    The morality issue is ridiculous.ST PETER will sort that out.It's all about money.I do agree that credit is much too available,but that is the lenders responsibility.Most ppeople intend to pay for their cars,unfortunately some people's financial planning rests on hitting the lottery.The lenders are supposed to be wise enough to see potential problems.That is their business.They sell money and it's hard to repo money.
  • lokkilokki Member Posts: 1,200
    You said,

    "Your example is a good one where innocent people lose because of a deadbeat. However that doesn't mean that good credit people will have a tougher time getting the best rates."

    Uhm, while people with good credit will still get the best rate, the best rate is higher than it need be if they did not have to subsidize those who do not pay off their loans.

    While the issue of "moral vs immoral" conduct is pretty esoterical for a discussion group talking about car loans, I think that you will have to agree that there is a negative impact on other members of society from those who file bankruptcy.
  • afk_xafk_x Member Posts: 393
    You could not be more wrong.

    You said..."Uhm, while people with good credit will still get the best rate, the best rate is higher than it need be if they did not have to subsidize those who do not pay off their loans."

    This would be true if lending was a monopoly or an ogopoli. Its not. Free market forces keep your statement from being true. The people with the best credit will always be able to get a rate slightly over the banks cost of the money. Good credit people have the ability to shop and seek out the best rates. Good credit people are not the ones making the lenders money hand over fist. Its the people with challenged credit that must pay a high rate of interest.

    Even with bankrupcys at an all time high I don't see lenders going under.
  • alfoxalfox Member Posts: 708
    BK's are a cost of doing business, and whether or not that cost is entirely recovered from predatory interest rates charged to credit risks is arguable - but probably not provable one way or another using public information.

    However, the increased cost of doing business trickles quickly down to the retailers who's revolving accounts are swiped clean by a bk, and whose rates are fixed. To some extent the cost of goods and services is increased to some degree by the cost of bad debt. Along with bad installment credit usually goes bad checks, and other cash losses.

    Yes, some lenders are predatory. Some credit card companies, "Buy-here Pay-here" lots and state lotteries are (IMO) aproximately akin to tobacco companies in that they are selling legal products that intelligent people with self control avoid. None the less, the products are legal, and are purchased willingly.

    Blaming a credit card company because I charged myself into excess debt is like blaming a gun manufacturer for my willfully shooting someone. But then, people aren't much on accepting personal responsibility these days, so maybe I'm just old fashioned.
  • lokkilokki Member Posts: 1,200
    You said

    " [I} could not be more wrong."

    "The people with the best credit will always be able to get a rate slightly over the banks cost of the money. Good credit people have the ability to shop and seek out the best rates. "

    Possibly true... but then who IS bearing the costs?

    This is a zero sum game. Someone absorbs the costs when a bank makes a loan that isn't repaid. The bank can't call the car dealer and get the money it paid the dealer for the car back...

    Somebody loses... who is it?
  • andre1969andre1969 Member Posts: 25,259
    ...that the people with the best credit risks will always be able to get a rate just over what it costs that bank to lend the money, wouldn't it make sense, that if there were fewer bankruptcies, the bank's cost of doing business would go down? Therefore, the best credit risks would be able to get an even better rate.
  • jb_thecserjb_thecser Member Posts: 24
    Afk can't seem to grasp that concept, however.
  • mazdaprofourmazdaprofour Member Posts: 202
    Well I filed today. It takes 30 days for the court date to be set and 60-90 for the discharge letter. The lawyer said that do to my low income and debt amount, they do not see any problems at all. She said that 95% of bankruptcies are approved and only 5 percent are changed into a chapter 13 if the trustee felt that the person could pay a large amount back. I will be waiting on my letter.
  • grbeckgrbeck Member Posts: 2,358
    afk_x: "Sounds like you are saying the credit card companies are asking for government assistance in controlling who they offer their cards to."

    Maybe I didn't make myself clear, but that is not what I was saying. Some people, mazdaprofour included, make it sound as though credit card companies are forcing people to use credit cards and take on more debt. Now, if credit card companies use the tactics I outlined in my previous post, then I would say that they are guilty as charged. But they aren't. Merely sending people offers in the mail or setting up booths at fairs and college campuses does not constitute "forcing" people to sign up for unnecessary credit cards. Anyone is free to throw the offer in the trash or walk right by the booth. If credit card companies were soliciting the mentally handicapped or minors, then I would have a problem. Everyone else is a competent adult and should know his or her limits.

    "They will call you at your work place when you take advantage of this wonderful offer and then can't pay though."

    Well, yes, IF you decide to accept the credit card company's offer and then overspend. But that's your fault. A person must take an affirmative step to accept the credit card company offer. Don't want any calls at work? Then throw away the offer. I do it every week, and I've yet to receive a call from a credit card company.

    "I do agree that credit is much too available,but that is the lenders responsibility."

    And when lenders tighten standards, one of the first new threads on edmunds.com will be, "Heartless lenders refuse to extend me credit for new car." And the poster will be someone with a $40,000 yearly income who swears that he/she will have no problem paying for that $35,000 SUV or sport sedan that he/she MUST have.
  • KCRamKCRam Mt. Arlington NJMember Posts: 3,516
    While you may feel this is a compelling debate, this is an automotive board, not a financial board. I'll give you another chance to keep it on-topic - that is, automotive financing approvals when a BK is involved.

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • claywaterfillclaywaterfill Member Posts: 534
    It appears as though this topic must be played out as it has been all about morality the last couple of days.
  • oldharryoldharry Member Posts: 413
    As I buy used cars instead of new, I have found that even with my very high score (My wife's is even higher because she has a job and I am self employed. She works for me.) used car loans don't always have the best rates. I am contemplating buying my next car on my permanent low rate Visa card. That will give me the flexability to adjust my payments with income fluctuations. I always pay more than minimum, but that can still be lower than a car payment.

    grbeck, shred those credit card applications before throwing them in the trash.

    Harry
  • KCRamKCRam Mt. Arlington NJMember Posts: 3,516
    Clay (and everyone else),

    No, it will NOT play itself out if it stays about morality. If mazdaprofour wants to update his situation as it pertains to him obtaining a car with his BK filing, that's fine. But if the discussion stays on the morality of bankruptcy, it will be closed - quickly.

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • afk_xafk_x Member Posts: 393
    Due to topic drift I will make this my final post on the subject.

    1. Grbeck it looks like you were quoting me? When did I say or even suggest such things?

    2. After BK it is EASY to get an auto loan if you have downpayment and stable income. Obviously you're going to pay a high rate.

    3. I am amazed to hear all these people who apparently want it tougher to go BK. If you follow this thought process to its logical conclusion you will surely change your mind. There are laws on the books right now that prevent frivolous BK filings.

    4. The high rate of BKs does NOT affect the ability of good credit people to get good rates. The cost of doing business of course goes higher because of BKs but this does not affect rates for good credit people. It merely lowers the profits for the lender who made a bad business decision by loaning money to someone they shouldn't have. COMPETIION forces lenders to offer good credit people the best rates or the good credit people will go somewhere else. The best rates come from Banks that are more conservative and don't lend money to high risk customers. In automotive lending a good example would be Chase. They have fantastic rates for 700+ score. They don't touch bad credit. However I assure you that Chase has customers that go BK. Boo hoo they make a little less money this year. Should they raise their rates to compensate? Not if they want to continue to capture the business of the people with the best credit. Economics 101.

    5. No one here has ever said it is the credit card companies fault. I maintain that they share a part of the blame - the potential profits clearly are outweighing the defaults as Mazda said even with 90 day+ lates the offers keep rolling in. The ULTIMATE responsibilty falls on the BK filer. Everytime. Regardless of sickness - loss of an eye - stupidity - family pet dying - bad business deal - crooked lawyers or any other reason you can think of. Thats why BK filers have to "pay the piper" and must pay higher rates.

    Thats all for now folks. Stay tuned for next weeks lesson where I teach you how to shop for gourmet coffee at discount prices.

    Class dismissed.
  • grbeckgrbeck Member Posts: 2,358
    afk_x: I apologize for that. I was responding to lleroi. You're correct; you never said those things. Forgive me for my carelessness.
  • lleroilleroi Member Posts: 112
  • mazdaprofourmazdaprofour Member Posts: 202
    Hey guys. Like the host stated, I would like this topic to stay away from the moral issues. I mainly want to be able to share my experience so that someone in my place can see what the down side and up side is. I am going to keep everyone posted on my progress. You guys have been a great help and I do value all of your opinions I would hate to see this board get shutdown due to moral conflicts. The bankruptcy has already been filed and I am awaiting a court date. I will be checking this board daily. Once again, thank you.
  • black_tulipblack_tulip Member Posts: 435
    So, then what is the difference between this topic and tomm14 "Need advice on leasing or buying after BK" Jun 10, 2002 11:15am ? Seems like duplicates to me.
  • claywaterfillclaywaterfill Member Posts: 534
    Well, this one was first, was it not?
  • lokkilokki Member Posts: 1,200
    1. Don't do it if you don't have to. Buy a used car for cash and suffer along. Put the money you'd otherwise be putting into car payments into the bank. No matter what happens to your credit after bankruptcy, you're going to need to rebuild your savings account.

    2. If you must do it, then shop for your car carefully - often the best bet is a one-year-old used car. Still under warranty, but the first owner has taken the lion's share of the depreciation. Often they will also still qualify for the lower 'new' car loan rates.

    3. Put as much down as you can, to keep your payments low, and to make sure that you don't get 'upside down' in your loan. That way if things do get worse you'll have something to sell that you can take money out of when you can't make the loan payments, rather than having to give up the car while keeping part of the debt.
  • elfieelfie Member Posts: 47
    I did a little checking and it is possible that the Trustee will move you to a chapter 13 if you can make payments. I believe the exact wording I read was:

    "A number of courts have concluded that a chapter 7 case may be dismissed for substantial abuse when the debtor has the ability to propose and carry out a workable and meaningful chapter 13 plan."

    I'm not saying that they will, but just letting you know that since you are employed and you think you can save $700.00 per month, it is possible. I would definitely speak with your attorney about the possibility and make sure you get specific answers. 95% of all cases may be approved but they can't guarantee that you won't fall into the 5%.

    The car dealer may be willing to finance you, but you need to think about dependability as well. They may have good warranties but that doesn't help if the car in the shop a good portion of the time and the dealer doesn't have loaner cars, doesn't offer them for your type of car or only offers them if the car will be in the shop over a certain amount of days. I would advise that you check into those issues as well prior to purchasing.

    Also, if you did as others suggested paid cash for an older car and were able to save $700.00 per month - in a year you would have $8400.00. That would make a great down payment on a Toyota, Nissan, Mitsubishi, etc who have sedans ranging from $12,000-$15,000. It would also make it easier as you would have less to finance, would get a better rate and improve your credit by making payments.

    Just my 2 cents and good luck.

    Jackie
  • mazdaprofourmazdaprofour Member Posts: 202
    Thank you for your input. What the lawyer did was to list my income and wifes income and started to deduct for expenses. Once she did that, we had under 50.00 a month left. She deducted for a lot of things that I did not even think of. We shall see.
  • saturnfansaturnfan Member Posts: 40
    Mazda,

    As you said, most of the income & expense schedules indicate that a chapter 7 is appropriate. An experienced bk atty should warn you if they see otherwise.

    You'll probably have a 5 minute (if that long) talk with the trustee. Then, about 3 months later, you'll receive your order of discharge.

    Whatever led you to bk, hope the mistakes are not repeated and you have a prosperous future.

    Moral issues aside, bk is very valuable for many situations to avoid creating indentured servants who can never become free of their debt load.
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