If one is no longer paying their

[howdidithappen]

mortgage, and can't afford it, do you somehow indicate that on a loan application for a car?

[IBroke]

Well, I'm not even sure how you would indicate on a loan-application that you can no longer afford your mortgage. I've yet to see a loan-application with the question "can you afford your mortgage?" so as a result, you are not required to indicate that and unless you want to be denied, you certainly don't put that on your application.

If your mortgage has been discharged, you are not required to pay it and therefore, are not required to mention your mortgage-payment on your application, either. If you are asked for your housing-expenses, you can say that as of right now, you only have to pay the utilities and are planning to move in the future to a cheaper rental.

Now, if your mortgage has not been discharged, it might not matter what you indicate and what your intentions about paying your mortgage are. They are going to use the numbers on your credit report and figure out if they can approve a loan based on your income and your other monthly responsibilities - including your current mortgage.

[Pjmax]

I'm trying to figure out how to say this gently. You are trying to apply for a loan, and basically want to tell the lender that you can't pay the bills you already have. And in addition, you have a dismissed BK on your report. I think if you could find a lender to look past that, it would be at a ridiculous rate. I know you are desperate for a car right now, but until you get your finances squared away, you should consider a cash car, buy here pay here, etc. You can find some decent cars for under $2000 that could last you a year or two.

[tobee43]

i'm with Pj and IBroke on this as well. first, if you apply to get a car loan they will see on your credit report that you are behind on your mortgage and your credit is bad, therefore one of two things will happen. one being the answer to the loan is NO or two, the answer is YES at 25% or some ridiculously high interest rate.

i agree with Pj, get a car that you can pay for as opposed to worry about. if you last you a year or two your credit will be good enough to get a newer more reliable car. best of luck to you!

[howdidithappen]

Thank you for your candid answers. Don't understand why I haven't been told the same by my lawyer.
Mortgage payment is much, much more than a car payment will be.

[Pjmax]

Possibly, if you can wait for your BK to reopen and you get a discharge, you can get an auto loan, it still might be kinda high, but you can always refinance once your credit improves. Maybe your lawyer was talking about a car loan AFTER discharge?

[howdidithappen]

No, lawyer was not taking about a car after discharge. I am disabled - live no where near any public transportation. My disabled son also lives with me. No family close by either.

[RichM]

Look, I hate to be blunt, but if your mortgage is in default, then I don't think you're going to be able to get a car loan in the usual way. Once the BK is discharged, sure. But while in default, with a dismissed BK... I'm afraid it's not promising.

The good news, as I mentioned in another thread of yours, is that I consider New Jersey to be one of the best places in the world to buy a used car. If you can scrape up 2K, you should be able to get something decent, especially if you're able to drive standard shift. Standard shift cars tend to have much lower resale values because the majority of drivers nowadays don't know how to drive stick.

There also are cars that just aren't popular because of reasons having nothing to do with their reliability, and others that have a reputation for lasting forever. For example, I often recommend a 1998-era Honda Civic with the 1.6 engine to new drivers or the seriously broke. Those things just run forever. Subarus from the late 1990's into the early 2,000's can also be had on the cheap, and the 2.5-liter flat four engine is famous for its reliability. Saturns from the late 1990's through 2004 also were pretty reliable, and their plastic bodies don't rust.

You really need to be thinking on the older side of used, maybe with not the best body and an interior that's seen better days, but in good mechanical condition and with a reputation for reliability. You also need someone who's car savvy to go with you for the inspection and test-drive. Hell, if I still lived in New Jersey, I'd volunteer.

My point is that there are plenty of cheap, serviceable cars on used car lots and Craigs list. But you need to know something about cars to find one.

Another option is to call or visit a new car dealer, ask to speak to the General Manager, and explain your position. Lay it on thick, maybe shed a tear or two... and then ask him / her to do you a favor and keep their eyes open for a really cheap, reliable trade-in for you. New car dealers take vehicles in trade. Some of those vehicles run okay, but are not in the best cosmetic condition. The dealers want to get them off their lots, so they sell them at auction, sometimes at a loss. But if they know you're down on your luck and looking for cheap transportation, some dealers will call you first if they have a car they think might meet your needs.

I really feel for you because I've been in your situation. I used to need a car for work, so not having one was a real crisis. But you have to be realistic. You're not a good credit risk right now, so you're going to have to lower your standards. Think reliable, not pretty.

And again, try to find someone who knows cars to help you out with this, preferably someone who has an OBD2 reader (or better yet, a professional OBD2 scanner) and knows how to use it, in addition to not being afraid to get his or her hands dirty. (Maybe a student from a local automotive tech school, for example.)

-Richard