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Bankruptcy and Vehicle Financing

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Comments

  • saturnfansaturnfan Posts: 40
    Well, we've certainly heard a lot here on the pros and cons of bankruptcy.

    Mazda has been given the benefit of technical advice regarding the bk process as well as moral advice as to whether or not he ought to file.

    Now, it's up to him to make his decision and follow through with the issues resulting from it.

    Let's hope he carefully considers his options and does what he feels is right.
  • lleroilleroi Posts: 112
    being inflicted on you.Large companies regularly seek the LEGAL protection of bankruptcy.Many of your detractors in here are incorparated I'm sure,this way when they hit rough times they will stiff people too-only they will be blameless the corporation made them do it. The bankruptcy laws are there for you to use as well as them.

    Businesses use the laws as a way to encourage investers,professioal people use corporations to protect their assets ie doctors lawyers etc.Working people like yourself don't have these 'advantages"that is why this country has personal bankruptcy laws.One idiot even called for debtors prisons.This is as stupid an idea as can be imagined-it would be the doom of capitalism.The idea is to get you back into the consumer game as quickly as possible.Bankruptcy accomplishes this.

    The opinions expressed in here sound like the rantings of a collector trainee at ACE finance company.Personal bankruptcies are what this country is about-a fresh start.Your choosing bankruptcy makes you neither a bad person or a good person.It is a legal financial strategy.It will make things tight for awhile,but not as long as some would have you believe.Let the dust settle .You will not be paying 20%for a car loan,you will not be unemployable,you won't be shunned.

    BTW I am not an anarchist.I am self employed(incorporated-to protect my ASSets).I cannot begrudge an individual -who is a salaried worker-to avail himself of protection that is offered him .I have been left on the short end of the stick many times by corporations and professional individuals who have access to means much more sinister then bankruptcies.In fact I was once left in the cold by a new car dealer who went out of business during the night.That is the world we choose to live in.Give Mazda a break.
  • landru2landru2 Posts: 638
    I have one question. Who seeks advice on anonymous internet chat boards regarding something as serious and profoundly lifestyle -changing as whether or not to file personal bankruptcy?
  • lleroilleroi Posts: 112
    Who indeed?
  • mazdaprofourmazdaprofour Posts: 202
    lleroi, god bless you. As I was reading your post, I was finally releived to see one post that actually put into words what I was trying to say. I am not a perfect man but hey if a airline can hurt customers and protect itself under bk laws, so can a consumer ( not to say that everyone should scam corporate america).

    Tonight I got home and decided to take the wife out for a bite to eat (since we are on a budget, TACO BELL it was).

    I wanted to talk to her and hear what she had to say. She is my soul partner in life and the one person that matters the most to me. We sat at the table and started to eat. As we ate, I started to explain where I was with the bankruptcy thing and how she felt about it. She made it clear that she also felt that we have made a lot of bad choices. We have been careless at times with money. We could have waited on getting married till we had saved more money, that way we would have not charged up so much. We also looked back and had to face what the truth is. We did waste money at times and we alredy know that we need to change. I went over what our options are again. God only knows how much of my time is spent on just thinking about our future and this whole mess.

    As I talked I felt sad at where we are. We never planned this but it has happned. I wanted to cry, honestly. I just have been so stressed out and my mind has been so consumed with this stuff. She said that she is not happy to see me this way.

    We finally talked about what we thought would be the best thing for us. I told her that we could:

    a- Let the voluntary repossesd car get sold and add the 10,000 dollars or so to the credit card debt. This will all total around 25,000. We could repay this by me working overtime and us cutting back further (not much room left). I think we will need to pay atleast 800.00 a month for a few years (3-5) till it is paid off.

    b- Go through with the BK under my name and free up this money and save it monthly by having it moved into a savings account atomatically.

    We agreed that the first choice may hurt us more in the short run. First off, it would not allow us to save much, my credit is already hurt by the stuff that is joint with my dad, her job and mine are not very stable at this time and both our companies are suffering, we will end up being liable for the balance in the event that bankruptcy laws change and we are without jobs or one of us is hurt and cant work or she gets pregnant and can not work for a while (who will pay the 800.00 a month then?). We agreed that this is a risk that we can not take. She also felt that the best thing that we can do is to file the bk, wait out a few years to buy a home and just keep saving cash. We will use her credit for any thing that I can not get approved for in the meantime while I rebuild. So that is the plan. We shall only learn from this and move on and make sure that we never travel down this road again. I shared with her how much it hurts to see my credit go down the hole but life goes on. I will keep you guys posted. The dealerships have also been calling left and right they want the sale asap but I will wait to see how the sable stands up. She needs a tune up and new struts (i think).
  • alfoxalfox Posts: 716
    "Personal bankruptcies are what this country is about-a fresh start."

    Is THAT what America is all about? Really?? What happened to personal responsibility and accountability? What happened to the notion that we can take care of our OWN problems, without burdening everyone else?

    Personal bankruptcies are NOT what this country is about in my book. The bankruptcy laws are there for people who cannot avoid using them, as a last resort, to protect them from unscrupulous creditors. They are not there to improve an overspender's cash flow, or to "erase debts."

    "Personal bankruptcies are what this country is about-a fresh start." - I DON'T BELIEVE I READ THIS!!
  • saturnfansaturnfan Posts: 40
    Looks like you and your wife have carefully discussed your options and have made your decision.

    Please do let us know how things work out for y'all. Wish you the best from one who's been there.
  • dtwleungnycdtwleungnyc Posts: 188
    Not sure about other states and cities, but in NYC. You could be deny of auto insurance if you have filed bankruptcy or deemed as a credit risk. Something more to think about.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    That continues to bother me is this...

    Why, Mazda won't you answer the question about going to Credit Counciling? you have been asked this many times in this forum.

    You have said...NO COMMENT.

    I mean, what's the deal?

    Alfox, your last post was RIGHT ON !
  • mazdaprofourmazdaprofour Posts: 202
    I just got done readin a article about how many credit counseling services have been cheating cutomers and not paying off the debts on time for the customer. The fact that you seek cccs help in many cases that I have ssen, makes it extremely diffcult to obtain any new credit. The funny thing about all this is that the whole system is screwd up in my openion.

    When I was a good little paying customer, I still could not get approved for anything. It would always be something " oh you owe too much" "oh your income is too low" "your credit is too new". Always something. You would want to think that paying on time and being a good customer gets you into a car or home but no sir. We could not even buy a home cause the credit system is just a joke. You get the run around with good or bad credit. Do you think that anyone will allow me to buy a home when I am getting help through cccs and owe 25,000? No! excuse after excuse! Either way folks I am screwed. Like I said, set the moral factor aside and lets talk money.
  • Kirstie_HKirstie_H Posts: 11,077
    Mazda, seeking credit counseling does NOT mean you have to go with that service, it just gives you other options to explore. As you well understand, this is a hefty decision, and I'm sorry that it's one you're even faced with making.

    There are credit counselors that are reputable, who may be able to work with you to formulate a plan that you are comfortable with. Check out financial advisors in your area as well as CCCS.

    We had some credit difficulty too, because my husband moved here from another country and had no credit or job history here, and some sound financial advice helped us reach our goals more quickly.

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  • saturnfansaturnfan Posts: 40
    There are many fraudulent credit counselors out there that imply they're like CCCS but really just make things worse for you. You are correct about that, Mazda.

    The real CCCS members are truly non-profit and normally will counsel you for free or a very minimal contribution. If you use them to set up a payment plan, the creditors many times pick up the fees from the real CCCS members. For more on this, see www.clarkhoward.com.

    Going through CCCS will still hit your credit record but for not as many years as a chapter 7.

    Some credit grantors actually prefer ex-bankrupts since:

    1. They can't file again for 6 years
    2. Their previous debt load is erased

    Strange, huh? I got so many offers from "bottom feeders" after I filed that my mailbox was stuffed for months.

    As a moral point, Chapter 7 only discharges you of your legal obligation to pay the listed debts. If you later want to pay any or all of them, you are perfectly free to do so.

    You can normally be considered for a mortgage after 2 years from discharge. Some landlords will be picky. Others really care more about your previous rental history, and won't hold bk against you.

    All credit grantors see applicants according to their own standards. Shop around but do be careful of the "buy here pay here" kind of merchants.

    Hope you find a good atty and things go smoothly.
  • alfoxalfox Posts: 716
    "When I was a good little paying customer, I still could not get approved for anything. It would always be something " oh you owe too much" "oh your income is too low" "your credit is too new". Always something. You would want to think that paying on time and being a good customer gets you into a car or home but no sir. We could not even buy a home cause the credit system is just a joke. You get the run around with good or bad credit. Do you think that anyone will allow me to buy a home when I am getting help through cccs and owe 25,000? No! excuse after excuse!"

    Nobody could honestly say things like this with a straight face! That sounds like a Monty Python script - "nasty lenders, they always want too much from people, like being able to pay them their money back Scoundrels!"

    No wonder the hosts are being so tolerant - this is a setup, right? See ya.
  • jb_thecserjb_thecser Posts: 24
    It's WAY different when a corporation files BK versus an individual. The corporation shields the individuals from personal liability so they walk away clean and free and can go run another company into the ground. When an individual does it, it haunts them for years.

    Mazdaprofour-

    So basically you and your wife decided that you should go with bankruptcy because it'll be easier on you? Absolutely zero thought of the creditors you're leaving holding the bag for stuff you bought? You both still have jobs, and if you need it, bankruptcy will always be there.

    I know you didn't plan this and that you're feeling overwhelmed, but I can't help but think that if you file, it'll be much worse on you in the long run than if you just suck it up and pay off the debts. Filing bankruptcy IS NOT the easy way out. I've never had to file, but people close to me have. It's no cakewalk, believe me.

    If you only owe $25,000, you could be free and clear in 5 years at only $500 per month at 8%. That would still leave you a $200 or so per month in savings. You're not even going to consider it? Don't call one of the shady credit repair shops, call CCCS itself. They're a nationwide, not-for-profit company. They will help you for little or no money. JUST TALK TO THEM!

    I think your lawyers are sugar-coating this whole thing for you. Why? Because they want their fee. If you don't file with them, they don't get their fee. Of course they're going to tell you it'll be easy to dig yourself out because that's what they want you to believe.
  • lleroilleroi Posts: 112
    it is interesting.

    My life is pretty good so I'm on the consevative side-but I'm not a hard [non-permissible content removed].I realize that my prosperity is dependent upon those less fortunate having hope for the future.In cases like Mazda's the BK laws provide this hope.

    I have customers who are experiencing rough times.My choices are to put them out of business or forgive their debts.I chose the latter-my wife thinks that was a flawed strategy.They helped me prosper during good times so why shouldn't I bite the bullet now is my answer.

    This country was not created for "responsible"people.It was stocked with "bad serfs".People who refused to honor their "commitments".The bankruptcy laws were intended to make sure we did not create new serfs.Creditors are well aquainted with the laws governing BK's.This is supposed to guide them on extending credit.

    Some of the responses in here sound like the arguments used to keep sharecroppers on the land.Capialism needs BK laws to function and grow.Why should a citizen be chastised for doing the same thing corporations do?

    To listen to some of the opinions in here one would think we are a nation of deadbeats.If that is the case why stay here?Mazda will pay a "consequence for his actions-that is how it should be.But his consequence will not and should not remove the hope of a decent life for his family.

    I agree he should investigate all his alternatives.If he chooses BK that is his right.BK is not an irresponsible action.He will be totally responsible for exercising his BK right.The people who created this laws and gave their blood for this country did so for the Mazda's of this country not the tight asses.

    As that great American Forrest Gump said"and that's all I have to say about this".
  • alfoxalfox Posts: 716
    However, your willingness to forgive is somewhat dependent on the best intentions of the borrower. If you are dealing with honest and honorable customers, you can both benefit by cooperation. If you are dealing with scoundrels, they will clean you out.

    Somewhere in between are most bad debtors, like this one. If your business is to loan money, that's how you earn your living and feed your kids. You can afford to work along with people who want to succeed, and have the resources (earnings, ability and desire) to repay the debt. What you cannot afford is the ones who haven't made the connection between the ability to borrow and the responsibility to repay.

    This example takes it all one step farther. He's no longer trying to solve the problem, but wants the court to forgive someone else's debts, and fully expects to borrow more afterward. That is dangerous - he needs to learn the responsibility end of it before he has the ability to borrow again.
  • lleroilleroi Posts: 112
    He will be limited on his ability to borrow until he proves himself wiser or time passes.As far as judging ones ability to pay that is the lenders responsibility as much as the borrowers.Lenders like borrowers can make stupid decisions.That is not a criminal or immoral flaw it is a genetic flaw.

    The freedom of choices available in this country are frought(I like that word)with risks.That's what makes it so great.It keeps the adrenaline flowing.Just like I said I forgave my creditors debts -that was a risk.I did so because I think it will be benificial to me.In most cases the "kind" decision is also the best one.

    I don't believe that all things should be based on worst case scenarios.A few hardcore deadbeats will make out-but the vast majority of BK cases are just "sh*t happens"situations.I see no great danger to our way of life by cutting Mazda some slack here.Few people who choose BK are sailing on their yachts or vacationing in the south of France.

    Just like Mazda will be forced to tighten up ,creditors will have to adjust if BK's become rampant.In cases like Enron where criminal intent is suspected there should be criminal charges-this should apply to individuals as well.But to impose this on all situations would not be fair or profitable.

    I hate to see people in this situation.I don't believe they want to be in it.Everyone looses.The BK laws are intended to minlmize the damage.I look at it like this-if Mazda owes me money and he needs something he will go elsewhere to spend his money.The choice is mine do I forgive his debt and continue to do CASH business with him or "whip a dead horse".I'm not in the punishment business.My wife like many in here take a hard approach.I'm somewhere in between the idiot my wife thinks I am and the "saint" my debtors think I am.
  • alfoxalfox Posts: 716
    But when they are in it, Iook for remorse, contrition, understanding of why it happened, willingness to prevent recurrence, etc. What froze everybody's heart from the start was the attitude, cockiness, and his expressed desire to get rid of the debt so he could buy a new car, and protect his "cash."

    Anybody with an IQ higher than his height in inches knows that his entire approach is a nearly assured repeat performance.

    Most people put some work into the solvency thing. I don't mind helping people to whom bad things happen, but there are plenty of medical problems, natural disasters and failing employers to go around. We don't need kids with backwards ball caps and baggy pants driving Honda shopping carts declaring bankruptcy every couple years to pay for the Folgers cans for their tail pipes. That's the image he gives. I think "pull up your own pants and clean up your own debts" isthe right message for the image presented.
  • oldharryoldharry Posts: 413
    Mazda never did tell us what state he lives in. While BK is filed in federal court, state laws have to be considered. I question his claim that he can file with minimal effect on his wife'e credit. Here in Illinois, it is not a community property state, but assets aquired during marriage belong to both, and debts accrued during marriage are not totally independant.

    If this isn't a set up, I would really like to see what happens when he files.

    Harry
  • saturnfansaturnfan Posts: 40
    Same asset rules in my state, Oldharry.

    Sometimes both spouses file, sometimes they don't. Depends on who's on the contract for the debts.

    Regarding assets, most consumer bk's are no asset cases even including all property of the marital estate. If they've got a lot of cash or stuff, the atty needs to be sure the non-filing spouse acquired the assets before marriage.

    These are the reasons why you need to pay the $ for a good atty and not some poor [non-permissible content removed] that can only fill in the forms.
  • joe2617joe2617 Posts: 88
    How come all I see here is about chapter 7? What about chapter 13? Also I understand declaring bk if someone loses their job or has some other problems but bk protection is not for people who just ran up their credit cards without the ability to pay. Managed credit counseling hurts your rating also. Banks see that as the first step toward a bk.
  • au2003sgau2003sg Posts: 1
    I've been contemplating a lot these days...a divorce, child support, back surgery, legal fees, and student loans combined total of almost 40k about what I make a year, not to mention the 4 months of being layed off out the past 25 months. If I filed BK I could start out fresh. From what I read, yes I would have high interest rates for a while possibly 5 years, who knows but building credit again. If I continue to try and pay off the debt I'll be in debt for probably 5 years with no savings. I know what Mazda would do. I know what some of you others would do. I don't want to do the BK thing because I do have morals but at the same time I would have to agree with Mazda to a certain extent. I just don't know what I'm going to do.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    I think you just answered your own question.

    Sounds like you are going through a tough time in your life. Hopefully you can work with your creditors and avoid taking the terrible step of filing bankruptacy.

    Good luck during this difficult time in your life!
  • lleroilleroi Posts: 112
    obivious sources of advice during difficult times.A friends son was going through a situation similar to yours.She did not have he resources to help him out and asked my opinion.

    I am not a financial expert and could only express my sympathy.Later that week I mentioned her sons problem to a banker friend of mine.He offered to meet with her son.Unlike an attorney or a credit counseling service he had no personal agenda in reviewing the man's finacial situation.He was able to look at the numbers in a business like non-judgemental way.

    The advice he gave my friends son seemed to clarify his situation.He made what he thought was an informed choice.That's really all one can do in these situations.

    As far as the effects on a person getting approval on financing a new car after BK or credit reorganization that is going to vary greatly depending on income.The main concern should not be focused on getting a new car.If a persons finances are causing marital or employment difficulties a BK can ease this stress.I would say that keeping a marriage together and maintaining employment in most cases are more important then a credit rating.

    The important thing is to know up front what the consequences of a bankruptcy are and being prepared for them.A banker would seem a good place to seek this advice.
  • saturnfansaturnfan Posts: 40
    Try to avoid bk if you can.

    Even if you file, child support and student loans (if federally guaranteed) will not be discharged.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    ...this discussion needs to remain automotive oriented. General questions or advice on filing bankruptcy are best left to legal or financial websites. Thanks!

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  • cliffy1cliffy1 Posts: 3,581
    In an attempt to keep this "on topic" I'll only comment on what I have seen in my office. A BK will wipe out many debts, but it does nothing to alimony or child support. In fact, there is only one complete and total disqualifier in auto financing and that is being past due on child support. You can have BKs, charge offs, repossessions and active collections and get approved as long as you have a good down payment and a steady income. Even the biggest "drek banks" will not touch a person with past due child support on his bureau.
  • I have not read all posts here, just the first 20 and last 20. This topic has gone way off base, though. If you are still reading this, a couple of things. First, folks here are brutal on people with credit problems--so don't take it personally. Second, to answer your question, if you NEED a new car, no one will try to stop you, they will just reqire a higher APR.

    Your BK will have to be discharged. A couple of months after the Bankruptcy judge signs off on yours, you will get a discharge letter. At that point you can get a new car. My advice to you would be to wait a year or so--if that is possible. Not knowing you or your situation, I can not tell you you must do this. A member of my family filed Chapter 7 a few years ago. He HAD (read: the cars they had would not work for their needs, they HAD to get a bigger car) to get a new van about 5 months after discharge. He was financed through a company called Ameri Credit at just under 21% APR. About a year later (more than 1 year since discharge), their other car died. They bought a new (used) car and were financed through GMAC at 12.9% APR. What a difference a year makes. So, if you have to get a new car now, check out an Accent and be prepared for some hefty interest rates. If you can wait a year or so, you'll be in better shape.
  • cliffy1cliffy1 Posts: 3,581
    It wasn't so much the year that made the difference. It was the year of making a car payment and thereby demonstrating their true risk to the bank that got them the better rate. The first big loan after a BK is the worst. It gets better after that.
  • joe2617joe2617 Posts: 88
    A year of re-established credit goes a long way toward a lower interest rate. So does a substantial down payment. I hate it when someone comes to the dealership and say's" I just had my bankruptcy discharged. I have $500 to put down and I need to be at $200 per month." Especially if the bankruptcy only included a whole bunch of credit card debt.
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