Car Offer After Filing

[nioka]

I am amazed. I filed chapter 7 on 3/20 and today 3/22 I got an offer in the mail from a car dealer as a "pre approval rapid credit recovery program." It is "0" down and will allow up to 20% of my gross for a monthly payment. The offer fails to mention the interest rate.
I am shocked as to how fast they responded.

[LadyInTheRed]

This is very common. The vultures are coming out ready to pick your bones now that you will have no debt and be unable to file another Chap 7 for several years. I bet they won't actually fund a loan before you are discharged.

20% of gross? Wow! For me, that would be almost as much as my mortgage payment.

[nioka]

LITR,

I posted this because they must of mailed the ad before the ink was dry on my petition.
They also failed to mention the interest rate.

I plan to drive my current car until the wheels fall off. Lots of luck to anyone trying to sell me a car.

[frogger]

We have actually replaced 2 of our vehicles since our bk. One is at 2.7%, the other is at 2.5%. There are some good financing deals out there after bk.

[nioka]

frogger,

Did you put money down?

I would imagine the more money one puts down the better the interest rate.

[iswmle]

I just now applied for the capital one blank check and was approved for $22,500 @ 2.61% for 36 months. Is this good? I don't think I am going to do it, though.

[frogger]

frogger,

Did you put money down?

I would imagine the more money one puts down the better the interest rate.

No money down, financed 100% of price, including tax, title, tag, the works. You hear about how bad it is with a bankruptcy on your report, but our credit score is 100+ points better now than before we filed.

[nioka]

frogger,

Thanks. That's good news for those of us going through the process.

I can anticipate many situations but the one that concerns me most is if the car fails.

[spidge]

I regret not buying a newer car before filing, but am still not putting as much toward repairs as a new car payment. The hard part is dealing with the inconvenience. I could not see how we would fund a ch13 if we had a car payment anyway.

iswmle, that blank check loan looks great if it does not bite into your disposable monies too much.

[nioka]

It has now been a little more than a week since I filed my petition.
I have had eight auto loan offers so far. Most say they are pre-discharge specialist. I have yet to see an interest rate.

[LadyInTheRed]

Most say they are pre-discharge specialist.

Interesting. I wouldn't think they'd lend to you prior to discharge because of the risk that you don't get a discharge, then file a new case and include their loan. I guess they figure they don't have much to lose since it is a secured loan.

[lomalindabk]

I just purchased a new car with an open no asset Chapter 7 post 341 hearing with a Trustee notice of no distribution.

In my situation, my attorney strongly suggested not to reaffirm the 24 percent APR I had when I purchased a 2011 Toyota in early 2013, a rate when I had zero positive trade lines, just returning from living overseas, a loan $4,000 upside down at the time I opted to surrender.

A dealership in Fontana, CA, solicited me a week after filing. I certainly was skeptical, as all should be by such offers.

But I did the math on potential pricing using Costco Auto Pricing program, the fact that the end of the model year is fast approaching for Honda Civics, and spoke extensively with the dealership's F&I man about my situation to get a strong idea of what terms I would face with my present credit scores and reports. Again my situation may be unique as all of my negative CR were charge offs from 2009, with no younger baddies. I had to resign my $70,000 a year job in early 2008 and and began receiving SSDI and early retirement the same year.

I filed Chapter 7 in June, and all of my medical and other open collections disappeared from my reports after disputing by phone and online to IIB or delete. Strangely, my FICOS increased by 80 points after filing, for example TU has gone from 577 in 2013 to 618 after my June 2014 filing and 641 three weeks after my 341.

I decided to pull the trigger to see what terms I could get.

With an Experian Auto Enhanced of 580, I landed 60 month financing at 14 percent. Optimum, no, but with the clearance pricing combined with Costco pricing I bought a 2014 Honda Civic EX with a MSRP of $21,880 tor $18,590. The dealer had APR point add ons, as they do for folks like me, and wanted 15 percent APR unless I bought GAP coverage at $590, bringing the purchase price to $19,180, which is still $1,000 or more off invoice.

Since my skyhigh Toyota loan was at 72 months at 24 percent APR, my new payments are the same for the new Honda at 60 months. I put $3,000 down, so with TTL I financed $18,140.

The F&I guy, who by this time I had worked with on the phone for a week or so, said at the conclusion of the deal that if I had waited for discharge, I may have seen 12 percent APR.

But by then I would have been looking at limited selection for 2014s and probably a $2015 withe little wiggle room on pricing.

All of our situations are unique, and in six months post discharge I will try Cap One for refii. Once my auto enhanced is 600 or better, I've been told I should see single-digit APR offers. Time will tell.

Yes, dealers are predatory for situations like mine, but ours, but, frankly, I was shocked at the terms and pricing I was able to get with an open Chapter 7.

I'm in the Central District of California. I grilled my attorney on whether I needed trustee approval to purchase post 341, and he was adamant that I could have financed before the 341 with no need for trustee approval.

[LadyInTheRed]

I'm in the Central District of California. I grilled my attorney on whether I needed trustee approval to purchase post 341, and he was adamant that I could have financed before the 341 with no need for trustee approval.

That would be true in all districts. It is Chap 13 debtors who need authorization to incur debt, not Chap 7. Unlike a Chap 13, in a Chap 7, the trustee doesn't have a claim to your post-filing income unless it is income generated by a non-exempt asset.