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Bankruptcy and Vehicle Financing
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At any rate, good job on your part. That number will keep going up if you stay on the path you've set.
Yes, billions.
If the bk is discharged, you shouldn't have any problems, with 10-15% down.
Ed
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We were told by everyone else that lenders typically like to see 6 to 12 months of good credit post bankruptcy. Secured loans, credit cards, stuff like that helps. We will be financing a brand new vehicle this next winter after the truck is paid off in December.
Be patient, it'll happen. Right now we have the truck loan and one credit card....we have our house loan too, but it doesn't get reported since we didn't reaffirm the loan.
Of course, our situation now is vastly different than it was when we filed, and our debt (extremely low, we learned our lesson) to income (which has gone up a lot since then) ratio is extremely low. We were afraid to even go look at a new car after hearing horror stories from friends of 24% interest. 10% certainly isn't great with all of the 0% deals going on, but I remember a year or two ago when 10% was not a bad rate.
Bottom line, if you have truly gotten through your issues, and are taking full advantage of the fresh start, there is no reason you shouldn't be able to get into a decent car you can afford.
Good luck!
Funny, though...from my vantage point, a lot (most it seems)of people who have had a BK or other credit problems never seem to learn.
They demand the top of the line model, sunroof, leather or an expensive gas hog SUV that they really don't need.
I look at their income, debt ratio and their credit report and see them getting right into the same position.
It's easy to see why it happened in the first place.
Others (the smart ones) take a much more conservative approach.
We are planning on buying one more car and at first I was thinking like old times, the biggest baddest SUV out there. Then I really got thinking, what I NEED isn't a gas hog SUV, what I NEED is a fuel efficient little car that's safe and 4 door. We aren't planning on buying until the truck is paid off in December.
Our DTI is a very low 15% even with the truck payment and house payment and the one credit card that we have. All I can hope is that we did in fact learn our lesson.
kcram
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You can't buy a car at all while your Chapter 13 is active - forget trying.
As far as "cannot finance any cars ever again", nothing in this world is forever.
Except ex-wives :-)
-Mathias
However, you will be paying very high interest if you are approved.
Lenders hate BK's of any type.
What the trustee is *probably* objecting to is that when you file for bankruptcy, you must list all of your debts including the car lease or mortgage. All debts have to be included in the plan. The law does not allow you to discharge some and to pay others.
I think that it is pretty unrealistic to on one hand to file BK and then expect to get a loan. Why would I lend money to someone who has recently stiffed other people who have lent money to her?
Having been through a BK myself I can understand how quickly things can change. Don't be so quick to judge without knowing all the circumstances. In our case things went from ok to oh no in 2 months. Its not a matter of *learning* or not, finances can change in a heartbeat.
Aren't there a couple different types of bankruptcies? One wipes the slate clean and the other kinda forces certain lenders to work with you.
" Why would I lend money to someone who has recently stiffed other people who have lent money to her? "
Because they can't file BK again for several years (I think 7 yrs). They will be prime targets for lenders. They'll pay astronomical interest rates, but they will get credit. But not until the BK is completed.
In a Chapter 7, generally all debts are discharged. A debtor *may* reaffirm a debt (agreeing to pay it) and allowing the debtor to keep the house and/or the car. If a debt is not reaffirmed, the creditor gets the security back.
In a Chapter 13, the debtor prepares a reorganization plan to be approved by the bankruptcy trustee. One of the major components of these plans is that the debtor must pay all creditors with discriminating against certain creditors.
For example, a debtor filed Chapter 13 in the Northern District of Illinois. About 80% of her debt is a judgement that her former employer was awarded as she breached her employment contract. She filed three payment plans with the court, none of which paid a penny toward the judgement. The Court finally rejected her bankruptcy and allowed the main creditor to attach her assets.
**Because they can't file BK again for several years (I think 7 yrs). **
There will be some parasites that will lend her money after the BK. Most won't touch her with a 10 foot pole.
Actually in a 7 you can choose to reaffirm or not, if you don't you can still keep your car/house/whatever and make voluntary payments. That's what we are doing with our house, however, if something happens we can walk away and its still discharged in the bk. We did it this way due to the lender lying to us and our attorney.......heck, they still won't come clean.
****There will be some parasites that will lend her money after the BK. Most won't touch her with a 10 foot pole.****
If there is a good reason for the bk (medical, loss of job, disability, whatever) a lot of lenders will give loans. We got our first car loan through a CU 2 months post discharge, interest rate was high, but it was a start. My Titan is currently leased through NMAC and our Focus was financed by FMCC but we refied it to a CU.
The reason why the dealer told you that is:
#1.) It hasn't been discharged .. and that might take 7/12 months depending on your area and what Federal courthouse is handling it.
#2.) It's a chapter 13 .. and 13's are a re-org and they can be a friggin' mess, and these can go on and on for 2/4/6 years depending on the pay-outs .. even when 13's show "discharged", these have a long shadow and only when all of the other debt is *fully paid* will it start to clear up - and thats "if" and "when" they reach the bureau's, if ever - and thats a story all to itself ..
Obviously I don't know the situation here .. but unless you had a business or a big gambling debt, this wasn't the way to go .. I think you might have gotten some bad advice and depending on the situation, you probably should have filed a 7 ..... "legit" BK's are not a good thing for anyone to go thru - the money, the loss of prestige, the ability to purchase ... not a good thing ..
Good luck ...
Terry.
What does that last sentence mean? It doesn't make grammatical sense.
...must pay all creditors... (makes sense)
...with discriminating against certain creditors... (makes no sense and partially contradicts the prior phrase).
So what is it?????
In a Chapter 13 Bankruptcy Plan, the debtor must prepare a plan that either 1) satisfies all debts or 2) in the case where that cannot be done, satisfies the debtors in a fair and equitable manner.
For example, debtor owes three creditors $10k each. The court would likely accept a plan whereby the creditor pays off all three creditors over the next five years. The court might accept a plan whereby the debtor pays off $5k to all three creditors if the trustee believes that that is the best the debtor can do over the next five years.
However, most courts will not accept a plan where two creditors get 100% of their debts paid and the third creditor is ignored.
Our reason is we were stationed in Alaska for three years. While we were up there I was also working. bringing in $1600 a month on top of my husbands pay. We had went ahead and financed two vehicles, because I was unable to have mine shipped up there from Wyoming. To make a long story short. We had extended in Alaksa, and the last min, they decided to send us to Idaho. Once we got down here to Idaho, my husbands pay litterally, I mean litterally cut in half, and on top of that, I had to become a stay at home mom of two. Yes my job transfered, but by the time I brought home my pay, ALL of my pay was going to daycare + some of my husbands. It just wasn't worth it. So now here we are, we voluntaraly turned in both of our vehicles, because we couldn't afford the payments, and had to take back my saturn, which has 113,000 miles on it. The saturn is now paid off, but we still can't afford the montly payments on the difference in our other vehicles after paying bills, groceries, diapers, and the other stuff you need to live. So after talking to several finacial advisors, they all told us our best bets are to file bk. But, my boys are getting bigger and are costing more. I am not proud of the situation we are in, but in some cases, it is just better to do what we have to do.
I hit a deer and my insurance company totalled my car out. I have since gotten a letter from the Trustee to incur a debt. I really have not tried to get financing yet, but I have found several vehicles and need to get the ball rolling. While searching the subject
I found this site and thought I would ask.
Any feedback on this would be most appreciated
I tried re-negotiating with the lenders for morre reasonable prices on those vehicles, but they won't even talk to me. I start a new job as soon as this one ends, but because we live in a very rural area, I cannot manage without a vehicle. There is no public transportation, and the closest grocery store is 25 miles away.
Suggestions? Will I be able to lease or purchase a used vehicle of some sort? To whom should I begin talking?
I'd appreciate all advice I can get...this whole situation is very painful.
They pay the "value" of the car which may be more or less than what you owe.
Oops, I noticed that you are in a ch 13.
I have no idea, experts????
good luck getting a "new" car in this situation.
Anyway, back to the car theft ........ the trustee will get any extra $$ (if there is any) after the insurance company settles after all the smoke clears ..
Terry.
I agree. Responsibility should work both ways, and now lenders will have very little incentive to be restrictive when loaning money.
Still, it's not quite as cute as when the credit card industry went before Congress some years back and begged for the government to help cover people's bad debt. That was great entertainment, and I was happy to see it went nowhere...
Anyone remember the details of that proposal?
-Mathias
I look at hundreds of credit reports a month ... It all depends on how the actual credit report looks ... the bad thing about BK's are, they have a tendency to kinda "freeze" all the information in the report .. some accounts might show as they were in 98/99 or maybe it still shows "open" even in 03/04, some might show a balance, some might show it still exists with no payments made - it can show anything ........ the problem today is, most mortgages and car loans are based on Fico scores, not reality and most lenders can't even read a credit report nowadays ...
Do yourself a favor .. get with Free credit reports.com or a similiar info source and get all 3 copies from Equifax, Trans Union and Experian ... you might be surprised, sometimes it looks like 3 different historys for the same person ....... I know that Dan1 is trying to help, but thats kind of an "ol wives tale" about BK's and other credit situations "dissolving" in 7 years ~ no such thing .. I've seen BK's in reports from 1980 .... the only person that can make, correct or change any incorrect information on your bureau is only one person -- you ....
You got some time, so take advantage of it ..
Terry