Best car buying situation....

[sassiebaz]

We are getting a new vehicle. Had to find a co-signer. After we had it all settled he(co-signer) decided it was to risky to be on the title with me. So, he now wants to give me the money to buy the car. So, do I hurry up and file BK before this happens? Isn't the trustee gonna have a problem with someone giving me several thousand bucks to go buy a vehicle? How should I handle this?

[BigJohn]

I would keep trying to get the vehicle only in your name and with your own down payment. If you can't come up with a down payment, I would see about making a nice deal on a new 2008.

[spearmint]

I would keep trying to get the vehicle only in your name and with your own down payment. If you can't come up with a down payment, I would see about making a nice deal on a new 2008.

Why on a new 2008? Don't you need a downpayment for that, too?

[BigJohn]

Why on a new 2008? Don't you need a downpayment for that, too?

Some dealers have too many new 2008 vehicles on hand. If there is a chance of getting a new car with zero down, I would say the odds are a lot better with a 2008 model then a 2009. There might be the possibility of using the 'huge' discount on the 2008 car as a 'down payment'.

[IBroke]

Here's something I don't understand:

First, the OP needed a co-signer and all of a sudden, he could get a new car with $0 down AND without a co-signer?

sassiebaz, can you tell me why you had to find a co-signer? That would give us a better idea in what situation you're in. Chances are that you really need a downpayment IF your credit is not good - and if you really needed a co-signer, the only substitute for that might be cash coming out of your pocket.

What BigJohn said is correct - however, those cars with the huge rebates have a much lower value right from the start. The MSRP is fictional on these cars - and the lenders know that as well. For them, it is "normal" to finance a car for MSRP-rebate. The value of the car is still going to be much lower than that, so they might want to see some money from the customer.

As I said, you might give it a try but if they told you before you needed a co-signer, chances are slim you will get an approval on a new car with $0 down out of your own pocket.

[optimistic1]

The dealers and banks sound like they just bilk the hell out of anyone that is in a Chapter 13, by adding on enormous amounts of interest %'s to the tab. If this happens to me, I will be begging my older brother and sister, and my mom and dad to just buy me a car on their credit, and then I will pay for it and insure it. If the creditors sue me before I am below the median, I will just let it happen, because there is no way I will signing up for a 60 month Ch.13 plan.

[spearmint]

Why not?

[optimistic1]

The thought of being a 60 month plan, with the inability to get a decent vehicle without being raped, thats one reason.

[sassiebaz]

Ok, maybe I wasn't clear. We cannot get financed unless we go through one of those places that dont use your credit, just 12 references and 28% interest. Ok, so my Dad was gonna co-sign for us on say a $10K vehicle. But, now he has changed his mind and is willing to get a loan or just give us the money so we can keep it in our name. He doesn't want any liability. So, my question is: How do we explain we are buying a car from money my father borrowed and gave to us, that we are still responsible for payments on? Is that even possible? In relation to income, deductions and the trustee. Another thing is, we could hurry up and file then do all of this as well as start my little business, after the fact? Im not sure what to do.

[optimistic1]

28% I would literally throw up on their desk, that is so ridiculous, I would just rent a car.

[NowImDownInIt]

Okay, so is your dad expecting you to return the money while you are in the Chapter 13? I would expect that it wouldn't be a problem... I would pay the car outside of the plan and not even mention to the dealer that you are planning on filing BK... in case that isn't already a given. Most attorneys will "suggest without suggesting" that you purchase a new car to get through the 5 years if your current car will not make it and to get the financing while you still can. I would second BigJohn's suggestion of purchasing a new 2008 model and stay in that 10-15k range on the price. DO NOT go to one of those "your job is your credit" kind of places and get stuck with a craptacular interest rate. That is no good at all. I would consult with your attorney, if you have retained one (I'm just catching up on everyone and not familiar with your situation).. but I would probably take the money for the down payment and purchase the car in my own name as long as he is not considering this a loan due back in the immediate future, like someone you might list as a creditor on your plan. Your father is right to not to want to cosign right before you go into a 13 that could be very bad for him.

[sassiebaz]

Yes, we will be paying payments to my Dad.....is that allowed?

[spidge]

Why do you need a new car? How about something a few years old. Less money to spend and if you are carefull it will get you through the BK and set you up for something more desireable later.

[NowImDownInIt]

I would be careful then and talk to you attorney. you can't pay your father back outside of the plan, by that I mean putting a payment to him in your budget. That would be considered a preferential payment to a creditor. You would be able to pay him back within the plan, but he would have to be patient as he would not be considered a priority debt and would not be paid back until your secured debt, IRS debt, and attorney's fees are paid in full. Beyond that, your debt to him would be considered unsecured and would be paid at whatever percentage your unsecured is being paid at. So you would still owe him after you are done if he is expecting 100 %. If your plan has any wiggle room which not all do you might find yourself able to make small payments to him outside of your plan and budget, but you can't count on that. Your payments to him are not going to be an allowable expense going against your disposable monthly income.

[sassiebaz]

Ewwww, that is not good! Yikes. Maybe we should just do this all after we file......

We aren't getting a NEW car. We plan to get something atleast 3 years old if not older....