Does C7 allow better chance than C13?

[GoingUnderInNV]

So, I'm curious: does filing C7 and getting out in a couple months allow a better chance to get a new car loan than a C13 filer? I seem to read an awful lot here about C7ers getting great deals on loans and cars, and never the nitty-gritty on C13ers. Is there an issue? C7ers are walking away from their debt, and C13ers are paying it off: seems to me the advantage would be with the C13ers, but I never hear about tales from us... Is there a disadvantage to being a C13er if you need a new car?

[BassBoy]

The only disadvantage I see with being in a Ch.13 is that you need approval from the Trustee before you can take on any new debt while in your Ch.13. With a Ch.7, you have no debt to income ratio, so you have the disposable income in order to buy a new car. IMO, buying a new car after a Ch.7 is easier than buying a new car while in a Ch.13. That's not to say that you can not get a new car while in a Ch.13.....you just have to take an extra step or two before you can buy.

Just my thoughts.

[SinkingFast]

Actually, from everything I've read,............. Lenders look much more favorably on Ch 13 than they do Ch 7. Ch 13 Filers are paying back something. Ch 7 Filers, in the eyes of Lenders, completely walk away from their obligations to debts. So from that perspective, having completed a Ch 13 may actually give those people a leg up over Ch 7's.

Getting a loan while you're in a Ch 13 plan is a different story. From various posts here,........ It's tough to find a Lender,........ You have to get permission from the Trustee,...... Your monthly payment amount is gonna be limited by your Ch 13 Plan, etc. Even when you do jump thru all the hoops, the interest rates are high.

Not many people have successfully gotten a car loan while in Ch 13. Probably why you haven't read many posts from people who've done it.

[ez2bgramz]

I wondered the same thing.. do chapter 13 filers fare better than chapter 7 filers?... either with obtaining credit cards or buying new vehicles.. maybe i will be able to shed some light on that venture when we decide to jump in there and buy our first new car soon.. We're just kind of hanging loose for the moment.. but I did want to share this little bit of info on our first credit card..

We were discharged on 3/8/07.. (chapter 13) the CRA's were notified of our discharged on 3/12/07 well on a whim, and 5 minutes after my credit reporting alert, I did an online application with WaMu.. it was one of those preapproved cards... well we got the usual "we can't tell you yet" so i figured we wouldn't get the new card.. 24 hours later, we got a confirmation email congratulating us on our new card. And today, we got the welcome to WaMu package with a credit line of $2500, 9.99% apr and no annual fees... I'm thinking this is great! I've read here where so many people have trouble just getting the cards like Orchard or 1st Primier and cards like them.. all with high fees and what not.. Maybe it does make a difference whether it's a chapter 13 or 7..
ez2bgramz

[BassBoy]

GoingUnderInNV was confirmed in Dec. 06, so I assumed that the question was getting a new car while in a Ch.13......so........yes, I would agree that after the Ch.13 is discharge, you may be better off as far as approval and the terms of the car loan. Although while Ch.13, it may be more difficult than a recent Ch.7 discharge. IMO, those who have completed the Ch.13 "look" better than the Ch.7 discharges.

[GoingUnderInNV]

BassBoy is correct, I was inquiring about getting a new vehicle (a better choice of words would be "buying a second vehicle or motorcycle") DURING the C13 5-year purgatory. My current (and only) vehicle will not hold out another 4.5 years; I'll be lucky if it lasts through the summer. Given the high prices of vehicles and motorcycles in this area (they all seem very over-priced), I'm saving cash rather than thinking about getting a lender to pay the entire nut. But push-come-to-shove, I may be in need or some assistance with funding before all is said and done.

Sink the cash I've saved (again; this is the third attempt at saving for a new vehicle) into repairs, or keep for a replacement vehicle and have no transportation. Decisions, decisions...

[SinkingFast]

I hear ya, GUINV!!

Every month for us, seems we're making a repair or replacing something on the old beaters.

Sure makes it hard to save a down payment on another.

But I don't know how we'd squeeze a car payment, let alone allow for insurance, gas, etc, into our current budget.

BLECH!!

[phoenix44212]

But isn't the time line better with C7 or about the same? Say you go Chapter 7 and are discharged in 6 months. In another 2 1/2 years you will be much further than the person who filed under Chapter 13. If they were below the median income their ACP is 3 years. They will then just be getting discharged and have to wait an additional couple years to rebuild their credit. For the Chapter 13 filer with a 5 year plan, the Chapter 7 filer is now out of discharge 4 1/2 years. Am I missing something?

[lrprn]

For the Chapter 13 filer with a 5 year plan, the Chapter 7 filer is now out of discharge 4 1/2 years. Am I missing something?

What you are missing is the asset protection that Ch 13 filers have that Ch 7 filers don't. For example, if you want to keep your house and are behind on mortgage payments or keep your cars and are behind on car payments, Ch 13 allows you to keep these assets and make up the missed payments. Also when a filer's income is well above the state median, depending on circumstances, there may be no choice but a Ch 13 to get debt relief. See http://www.personal-bankruptcy-chapt...apter-13-7.htm for a good listing of the advantages of Ch 13 over Ch 7.

[tay666]

What you are missing is the asset protection that Ch 13 filers have that Ch 7 filers don't. For example, if you want to keep your house and are behind on mortgage payments or keep your cars and are behind on car payments, Ch 13 allows you to keep these assets and make up the missed payments. Also when a filer's income is well above the state median, depending on circumstances, there may be no choice but a Ch 13 to get debt relief. See http://www.personal-bankruptcy-chapt...apter-13-7.htm for a good listing of the advantages of Ch 13 over Ch 7.

Also if you have too much equity in your house and/or vehicles, you may have to go CH13 in order to keep them if your exemptions do not cover them.
Some states have very little exemption for things like that. Here in Ohio, it is only 10,000 total exempted for me and my wife. So if we go CH7 we will loose the house as it has more equity than that.
No one really wants to go CH13, but sometimes you just don't have a choice.

[CindyLou]

discharged march 06 chpt 7.......loan from Ford in April 06 at 0.9%....with 20%down