Any BK Friendly Car Loans out there (w/ decent rates)?

[OneDayRicher]

Hi guys!!

I am a brand newbie here! So here's my little thing, that I hope I can get some guidance on...

I was recently discharged for Ch7 in Nov 2019. I had reaffirmed my car, and my husband did not. He now wants to get another car (one that is more affordable). We have currently been making payments, I'm not sure how to transition from getting rid of his current car and getting a new one. (To be honest, i'm just scared of missing a payment LOL).

I know that I should def get a new car first and then stop making payments and/or surrendering the old car to the creditor.. I'm just worried if he will even get a decent deal on a car loan.. I'm not sure if i should have him wait until at least he's in his 600's to try getting a car loan... or should i answer to the millions of flyers and mail that we get daily.. ?

His score right now is so much lower (550s) since he does not have any loans or credit on his account. Mine was actually decent because i reaffirmed my car and my student debts brought my score way up, which is in the 660's range..

Has anyone had a decent auto loan rate right after filing BK? From which company? I really want to take each financial step with caution, as I plan on getting a house in 2 years.. or at least the soonest that I can qualify..


Thank you!

[justbroke]

You reaffirmed your vehicle but now want to surrender the vehicle? I don't think you'll be able to rescinding your reaffirmation and any surrender at this point will be a repossession. A repossession will truly hurt your auto-enhanced FICO score. If you want to buy a home in two years, you don't want that repossession either. (Although I don't know the impact after 2 years... likely not as much but your score will stay lower.)

Usually, after discharge, you'll be mailed and inundated with many offers for vehicles. If you just want to see if you pre-qualify, I suggest going to Roadloans first and then Capital One Auto. Each has a "pre-qualification" application.

[BigJilm]

You reaffirmed your vehicle but now want to surrender the vehicle? I don't think you'll be able to rescinding your reaffirmation and any surrender at this point will be a repossession. A repossession will truly hurt your auto-enhanced FICO score. If you want to buy a home in two years, you don't want that repossession either. (Although I don't know the impact after 2 years... likely not as much but your score will stay lower.)

Usually, after discharge, you'll be mailed and inundated with many offers for vehicles. If you just want to see if you pre-qualify, I suggest going to Roadloans first and then Capital One Auto. Each has a "pre-qualification" application.

At what point do we lose the chance to surrender a vehicle without being hit with a repossession?

My discharge was granted in February 2020. I have continued to drive the vehicle since then. My case is not closed yet, and the trustee estimates it won't close until summer 2021. Last week the lender for the vehicle filed a motion to lift the stay. There is a hearing for this matter on the 17th of this month. If I surrender the vehicle before this hearing, am I safe from being hit with a repossession on my credit report? Also, what is the general process for surrendering? Do I just need to contact the lender and let them know I want to surrender the vehicle, and they will tell me where to take it?

One other question: are there any current recommendations for the best places to seek a vehicle loan after bankruptcy?

[BigJilm]

Let me also clarify that I did not reaffirm this vehicle. It was part of the Chapter 7 discharge.

Additionally, I filed my bankruptcy in March 2019. I have not made any payments on the vehicle since then, so I am effectively "behind" on the payments by about $12,000 since filing. Does that factor into it at all?

[justbroke]

If your vehicle was listed as surrender and that was your intention, then it's up to the lender to repossess and dispose of the vehicle. Since the tradeline in the credit bureaus will report IIB (included in bankruptcy), that supersedes any reporting of a repossession no matter how far into the future the repossession occurs.

Your lender is not that bankruptcy savvy. Most lenders would have, upon reading your Statement of Intentions (SOI) and seeing a surrender, would file a Motion for Relief from the Automatic Stay (RFS) nearly immediately so that they preserve the vehicle's value. This appears as though the credit rested on their rights and have only now realized that this particular bankruptcy is going to take much longer than normal. (Yes, some creditors don't waste time filing the RFS and just await discharge, but there's something in your case where this creditor just lost track.)

The best place ot seek a vehicle loan, post bankruptcy, is nearly always a credit union (CU). CUs are very nice when it comes to automobile loans if you don't show a recent repossession. They also tend to have much better rates. Of course I recommend that you rebuild your credit a little so that you have at least a 620 score and most CUs would give you a car under 10% (that's my estimation only and based on my experience with Navy Federal). Some creditors use the not-so-known FICO Auto Score, rather than a FICO score, so there could be huge variances upon which score the creditor bases their decision.

[BigJilm]

Thanks for the feedback. My situation was a little unique in that I originally filed Chapter 13 in March 2019, and converted to Chapter 7 in August 2019. The vehicle was rolled into the Ch 13 payment, as I intended to keep it at the time of filing. When we converted to Ch 7 I told my attorney that I wanted to reaffirm the vehicle, but he dropped the ball on that and never filed it. I only became aware of that in February 2020 when I received my discharge. By that point, I had a change of heart and I decided not to keep the vehicle. This account does show up in my credit report with the Remark: Bankruptcy Chapter 7 Bankruptcy petition. My attorney has been pretty awful through all of this... so I wouldn't be surprised if he messed up the paperwork in some way. And he's impossible to get ahold of/never returns calls, so I mostly am on my own in this, stabbing in the dark.

[joshuagraham]

CrapitalOne seemed to always be begging me to buy a new car, rather quickly post-BK. I have been quite happy with my now 168K mile car with a CEL, broken A/C, broken windshield fluid pump, extracted headliner, body dings, and when I move to my next (and final) home, I will sell it (or give it away, LOL) and go into everything-delivered mode, with the occasional Uber ride.