Need car

[JollyGG]

We have two kids (3 years old and 6 months old) and we desperately need a better second vehicle. Our old S10 pickup is about to die and is way too small. Before filing we planned to pay of the loan on our car that we are keeping with our tax return and go buy a mini-van. Well I assume that is not the best idea now. So now we are thinking that we will use the tax return (yes, we have enough exemptions to cover it) to buy my aunt and uncles old Explorer and just keep making the last 4 or 5 payments on the car since that would show consistent car payments after the BK. Once the car is paid off in April we will put those payments into savings. We figure after a year we will have about $3,000 in savings for a down payment and have the Explorer as a trade in. We actually still had good credit when we filed. We will still have a mortgage, the car payment (until paid off) and a student loan for each my husband and I. None of those payments have ever been missed or late.
So my question is at the end of a year will I have good enough credit to qualify for a decent car loan? We want a 2 to 3 year old mini-van. What kind of interest rate should I expect on a loan? I know this is premature to think about but we really need that second vehicle. We may be able to handle waiting if we have a plan in place.

[HHM]

You are asking the $64,000 question of Bankruptcy, "where will my credit be when...?" The answer, I don't know. However, assuming you keep up good credit habits and what not, your credit will improve over time...will it be good enough to get a decent car loan, who knows...but again, the answer is probably. I am not being flippant, its just that credit ratings are proprietary formulas and algorithms of Fair Isaacs...so no on really has access to them to understand how "exactly" certain factors weigh in a particular case.

I think you have a decent plan and should have no problem getting a car loan in the future.

[JollyGG]

Thanks for the input.
I know that no one here has a crystal ball (otherwise we would have seen the future and avoided it). But I was hoping others could give me some ideas of what type of loans and rates they got after BK on used cars about a year after discharge. I searched the threads for some ideas but most of what I found was on new cars. I'm really not interested in a new car.

[SinkingFast]

One thing you might do, right at or immediately after your 341, is sign on with a Credit Monitoring Service and get to work cleaning up your Credit Reports.

Make sure all debts that were included in your BK are reporting correctly. Clean up any errors you find. The 60 Day Objection Period gives you enough time to have a couple shots at submitting disputes before you're discharged.

Generally, you dispute, the investigation is open approx 30 days, then you can dispute any remaining errors again. Of course, you'd have to allow time in there for mailing back and forth. But by the time you're discharged, you'd be well into your 2nd run at correcting errors and getting your accts reporting correctly.

Getting everything reporting correctly may go quick, or it may take a few tries. Starting early gives you a jump on the process.

[JollyGG]

Should everything be reporting as included in the BK already? I assumed that wouldn't happen until after discharge.

[FilingOnMyOwn]

Should everything be reporting as included in the BK already? I assumed that wouldn't happen until after discharge.

Depends, some creditors will report it as so immediately, others wait until after official discharge.

[CindyLou]

When it comes to buying a car, there are many many options available. I was extremely surprised at the ease at which I was able to purchase through Ford Motor Credit twice. Once right before I filed (and my credit was in shambles) and they again 2 months post discharge. Interest was 13% on the 1st and 0.9% the second time. Go to a high volume ford dealership and ask for the special financing department. My husband talked me into going the first time. We were driving a very unrealiable older car because I just assumed we couldn't get financing. I was wrong. Just be up front and hones about your situation. If a new car is in your budget then this is a good option. It is much harder to finance a used car and you will have to pay a much much higher interest rate. Keep us posted! Oh, and just a question: If you take over the payments on your relatives car, how will it report to your credit report?? You will have to qualify to take over the payments for that vehicle to be put into your name and that will be difficult to do. Taking over payments is much harder than getting a new loan.

And...............in answer to your question regarding the credit report; I saw many of my accounts start reflecting included in BK as soon as they received the notices. On the other side of the coin; a year later I can't get some of them to report it at all!

[SinkingFast]

Should everything be reporting as included in the BK already? I assumed that wouldn't happen until after discharge.

As usual, FOMO is right on target.

We signed onto a Credit Monitoring Service about a week after our 341. A few Creditors had already dropped off our balances and showed IIB.

We went ahead and "disputed" the rest as IIB. As of now, I have one Creditor left showing a balance on my Credit Report and Hubby has 2 left.

I can't take credit for this idea, tho. Nascar is the one that said it had worked well for him. Disputing early, before discharge seemed to help him get a jump start on rebuilding his Credit. I thought if it worked for Nascar, couldn't hurt for us to give it a try.

Just getting the debt dropped off seems to have helped raise our Credit Scores about 20 points.

But beware of the FAKO scores the Credit Monitoring Services give you. CCCS of Atlanta gave us our Credit Scores when we completed our Post BK Debtor Education. The Credit Monitoring Service's scores are about 100 point higher than CCCS's were.

[JollyGG]

[QUOTE=cindylynnsmith;71489]Oh, and just a question: If you take over the payments on your relatives car, how will it report to your credit report?? You will have to qualify to take over the payments for that vehicle to be put into your name and that will be difficult to do. Taking over payments is much harder than getting a new loan.[QUOTE]

We aren't taking over payments we are buying the Explorer. They want $1800 for it. Our tax return should be around $2000. So we should be able to swing it. My aunt and uncle will take payments if need be. Their price is way under book and they keep a wonderful maintenance record. So, the Explorer should last us through till we can get the mini-van we want. Plus the Explorer should give us a decent trade in value. We need something that fits two car seats.
But I see from my post where you thought we were taking over payments. We have an old 1984 S10 and we have a 2000 Buick. We will be done paying on the Buick in April or May but had originally planned to pay off the Buick with our tax return in Febuary and buy a mini-van once car payments on the Buick were done. Now we plan to use our tax return for my Aunt and Uncles vehicle and finish making the payments on the Buick till April, then save up what we would be making on car payments for about a year and put something down on a van when we buy one and hopefully take only a three year payment plan. I never had a single car payment until I got married and we bought the Buick. I just drove older vehicles I bought outright. So, I'm actually more comfortable with a used vehicle verses a new one. Really, to fit our budget we need payments around or under $300 a month so a used vehicle works better for us. I really want a vehicle that uses E85 so right now it looks like the Town n Country or Caravan are our best options. I'm hoping waiting a year to buy something will give us a better interest rate.
Our S10 is in such bad shape we are not even going to try and sell it. We are giving it to my brother in the hopes that he can use the parts to fix up his pick-up.