How long to wait after filing?

[ARO96]

My hubby and I will be filing Chapter 7 within a few weeks. It was a difficult decision for us to make. He works for a major airline and 4 yrs ago, he took a massive paycut. We've tried to keep up with the bills we had before the paycut, unfortunately we just can't anymore.

The question I have is this, we will be having a car repoed in the bk filing. We will be sharing a clunker for a while. I don't mind having one car, it will be tough, but we will just have to make due. The problem is the car is already a clunker and with us sharing it, not sure how long it will last. I have no desire to get a new car right after the discharge and paying 20% interest, 10-12% I guess I could deal with. How long should we wait before trying to get a new car? Should we wait 6 months, or push the clunker as long as we can? It's an old car and with two people sharing it, not sure how long it will last.

Any advice would be appreciated. Thanks.

[lrprn]

(ARO, I moved your post here to its own thread. You'll get more and better responses this way than buried at the bottom of an old thread. -lrprn)

A question for you first....which bankruptcy chapter are you hoping to file - 7 or 13? And which state do you live in?

Sorry to hear about your troubles, and glad that you found us. Hang out here with us for awhile - we'll help you sort out what your options are as best we can. Welcome to BK Forum!

[ARO96]

(ARO, I moved your post here to its own thread. You'll get more and better responses this way than buried at the bottom of an old thread. -lrprn)

A question for you first....which bankruptcy chapter are you hoping to file - 7 or 13? And which state do you live in?

Sorry to hear about your troubles, and glad that you found us. Hang out here with us for awhile - we'll help you sort out what your options are as best we can. Welcome to BK Forum!

Thanks. This forum has been very helpful. Hubby and I are new to this and are looking up as much info as possible. This has been the best since everyone here has gone through it or is starting to go through with it.

In answer to your question, we are filing Chapter 7 and we live in TX.

Like I said earlier, we don't mind sharing the old car and will make due as long as we need to. But it is an old car and with two people driving it, more wear and tear will be put on it.

My hubby thinks the best thing would be to wait as long as we can after the bankruptcy and then possible get a car for less then 5 thousand. Try to pay cash for it or try to finance it, that is what we are not sure of. Should we wait a few months, or as some have said 6 months or longer.

One of our cars will be repoed in the filing, will that hurt us more then just the bankruptcy in getting a new car?

[JollyGG]

Basically wait as long as you can.

While you are waiting work on making sure your credit report is completely accurate, and save, save, save for a down payment.

With your credit report cleaned up, a decent down payment, and a little bit of time between filing and the purchase the rates will still be high but shouldn't be too bad. Also take the shortest terms possible so that you get the best interest rate and so you are in that loan for the shortest time paying the least money in interest.

[lrprn]

In answer to your question, we are filing Chapter 7 and we live in TX.

Have the two of you met with several bankruptcy lawyers in your area to be sure you qualify for Ch 7?

Since you are new at this, you may not be aware that you don't get to choose which bankruptcy chapter you get to file - your income vs expenses in a complex set of cross-compared equations in the mandatory Means Test decides that. Has a bankruptcy lawyer run the Means Test for you yet?

Your answer about the cars depends on knowing which bankruptcy chapter you will file.

[ARO96]

Have the two of you met with several bankruptcy lawyers in your area to be sure you qualify for Ch 7?

Since you are new at this, you may not be aware that you don't get to choose which bankruptcy chapter you get to file - your income vs expenses in a complex set of cross-compared equations in the mandatory Means Test decides that. Has a bankruptcy lawyer run the Means Test for you yet?

Your answer about the cars depends on knowing which bankruptcy chapter you will file.

We've met with the lawyers. Chapter 7 is the way to go. The lawyer handling our case has handled several hundred from the same company my hubby works for. All the employees took paycuts 4 yrs ago, and thousands have filed bankruptcy. So I feel good about our lawyer.

We have no intention of running out and getting a car right after we are discharged, but due to the circumstance of sharing a clunker, we are concerned as to how long it will last. Hopefully the car will hold out for awhile so we can save some money and maybe pay cash for car. But if the car doesn't last, we may have to finance something. Just don't want massive interest rates like 20%.

I am guessing, corrrect me if I'm wrong, that the longer after the bankruptcy, the better in getting a good interest rate. But the one car we have will be repoed. How long does that affect us?

I've heard getting a car financed after bankruptcy is easier if a car wasn't repoed. Is that true?

[ARO96]

Basically wait as long as you can.

While you are waiting work on making sure your credit report is completely accurate, and save, save, save for a down payment.

With your credit report cleaned up, a decent down payment, and a little bit of time between filing and the purchase the rates will still be high but shouldn't be too bad. Also take the shortest terms possible so that you get the best interest rate and so you are in that loan for the shortest time paying the least money in interest.

Thanks. That is what we are hoping. Hopefully the clunker will hold out for a while. We will be saving like crazy so when the clunker falls apart, we will be in a better position to buy a car.

And never again are we doing a 5 yr loan. For now on, it will be 3 to 4 yrs.

[JollyGG]

If you give the car up as part of your bankruptcy it should be listed as Included in bankruptcy (IIB) not as a repossesion which will be better for your credit and for your chances of buying a second vehice down the road.

[ARO96]

If you give the car up as part of your bankruptcy it should be listed as Included in bankruptcy (IIB) not as a repossesion which will be better for your credit and for your chances of buying a second vehice down the road.

Thank you.

I'm learning so much from this site. Thanks.

We will hold on to the clunker as long as possible. Hopefully it will last awhile.

[lrprn]

We've met with the lawyers. Chapter 7 is the way to go. The lawyer handling our case has handled several hundred from the same company my hubby works for. All the employees took paycuts 4 yrs ago, and thousands have filed bankruptcy. So I feel good about our lawyer.

What a tragedy these cut-backs have been for all of you! So sorry to hear this, ARO But so glad to hear you have confidence in your lawyer!

I am guessing, corrrect me if I'm wrong, that the longer after the bankruptcy, the better in getting a good interest rate.

This is absolutely correct. If you can wait even six months after discharge, the offers you get will improve.

But the one car we have will be repoed. How long does that affect us?

If you surrender the car in your bankruptcy, the hit on your credit will be less than if you voluntarily surrender the car before you file.

I've heard getting a car financed after bankruptcy is easier if a car wasn't repoed. Is that true?

After hearing the experiences of other members here in the forum who gave up cars in their bankruptcies then got fairly decent loan offers close to discharge, I don't believe this is true.

It seems that if you have good credit accounts related to cars from early on showing on your credit history, this helps overcome the surrender somewhat. Have you successfully paid off cars before the ones you have now?

[ARO96]

When we got married, my hubby had a car that had high payments. He sold the car and we purchased a more reasonable one. I had a car that my parents had cosigned, I turned it over to them and they gave it to my sister. The car we had purchased before this new one, we didn't finish paying off the loan. We traded it in for a newer car, and covered the balance due at that time.

I don't know if this qualifies for paying off a car in a timely fashion.

Arrg, the mistakes you make in the past always come back to haunt you.

Probably drive the clunker for as long as possible. Looks like that is the best bet. And we will just save money like crazy. Honestly don't think I ever want to take out a car loan again.

[CindyLou]

The more down payment the better. I am living proof! I was able to put 20% (6000) down with Ford and combine with the 4000 cash back rebate they had at the time I ended up with 10,000 down total...which then ended up 30% down. With that they completely ignored my credit and my bk and put me me in the preferred credit category and gave me the 0.9% only 2 months out of BK. So keep that clunker and save save save save!!!! I had got a bonus and the switched jobs and got a vacation payout so I was able to have that cash so I was so thankful!!! Hopefully you can keep the clunker free of repairs with a little preventative maintenance. We'll all say a little prayer for you on that one!!!! Good luck. You are doing the right thing.

[ARO96]

The more down payment the better. I am living proof! I was able to put 20% (6000) down with Ford and combine with the 4000 cash back rebate they had at the time I ended up with 10,000 down total...which then ended up 30% down. With that they completely ignored my credit and my bk and put me me in the preferred credit category and gave me the 0.9% only 2 months out of BK. So keep that clunker and save save save save!!!! I had got a bonus and the switched jobs and got a vacation payout so I was able to have that cash so I was so thankful!!! Hopefully you can keep the clunker free of repairs with a little preventative maintenance. We'll all say a little prayer for you on that one!!!! Good luck. You are doing the right thing.

Thanks for the well wishes.

That is our plan. We will keep the clunker as long as possible, and just save as much money as we can. Just praying the clunker holds out for awhile.

Fortunately, my hubby can do quite a bit of minor car repairs. Some of the more big stuff, he can't. But the little things he does himself. He's saved us alot of money over the years by doing his own work on the cars.

[NOMOREBADCREDIT]

If you give the car up as part of your bankruptcy it should be listed as Included in bankruptcy (IIB) not as a repossesion which will be better for your credit and for your chances of buying a second vehice down the road.

this is not true it still can report as IIb and repo.

[CindyLou]

There is a very important order to this process!! The BK MUST be filed and the finance company must have already received your filing BEFORE you surrender or before they come get the car. If these things overlap or happen simultaneously then a repo could be listed. Once the car has been listed as a BK and they have received that info THEY CANNOT list it as a REPO. Period, the end. If they have they have violated the law.