Any companies that will do an auto loan if they know you're going Ch. 13?

[ej822]

We would like to buy out our truck lease to a purchase and include it in our Ch. 13 payments. Are there any companies that will finance you knowing you are going into a Ch. 13 bankruptcy? We're not having luck getting financed because of high debt to income ratio, but most of those payments will be gone in the Ch.13.

[SMinGA]

No.

When you file ch. 13, in most (maybe all?) districts you can have your loan paid in the plan and the lender only gets the till rate. Which is 4-7% or so. So no lender is going to knowingly accept that I think.

Any ability to save up more cash? With a larger downpayment you may be able to get financing - though at a sky high rate. Not so significant, see paragraph 1...

[flyinbroke]

Good luck saving cash though, with all disposable income going to creditors and TT. Unless you have a very generous TT you won't have spare change for cars unless you forego clothing, utilities or food.

[SMinGA]

My comment about saving a downpayment was in reference to before filing. Before all disposable income is going to the plan.

One alternative is to keep the lease in the ch. 13, until it ends. Should then be able to count the payment as an expense.

When the lease ends, petition the TT for permission to take on new debt to buy out the lease or buy another reasonable vehicle. In a ch. 13, I think the options for financing are out there. A lender knows you can't take their rate down to the till rate, and they know the payment must be approved by the TT - so they can trust your budget is sound. But you'll pay a higher rate. Someone recently here got funding @ about 18-19% I believe, while in a ch. 13.

[NoTomatoCan]

Just curious... how/why would the lender have to know that you are going into BK?

Have you already filed or are you just contemplating at this point?

[ej822]

We haven't filed yet. I just thought maybe there was a lender out there that would want to deal with Ch 13 since your payments would be through the trustee. The debt to income is high right now with the credit cards and 2nd mortgage. That would all disappear after we file. But getting someone to approve us now is proving to be tough. We haven't tried the bad credit lenders yet, though.

[NoTomatoCan]

Really, there is no need to let them know about your possible CH13.

Have you tried Roadloans.com? They seem to be a good source (although some restrictions on where you purchase). Others have had luck with Capital One Blank Check.

There are several threads out there that talk about which companies lend to folks with low credit scores or high debt/income.

[ej822]

I ended up going to a dealer with a "special finance" department, who got us approved. They were able to get us financed at 17.05%. The rate kills me, but I don't think it'll affect our bottom line. I'm pretty sure we're going to be at 0% payback as our disposable income by my calculations is $26.01.

[welovedis]

We are currently in the second year of our 5 year plan and I just got approved for an auto loan for a replacement vehicle. My interest rate is 8.19% and the vehicle is a 2008, financed for 48 months. We are putting a $6000 chunk down (our tax return which we don't have to pay into the bankruptcy) and are awaiting the trustee's approval.

Our older car needs more repair than the book value & I just started a new job, making more money so the amended budget with the new car pymt will give the trustee more than I have been paying up until now.

Hope you can find something at a more reasonable rate!

[Lissy]

Yeah, if your debt load is too high or your credit is in the crapper because you've stopped paying, you are better off waiting until after you file. You'll need trustee approval, but in my experience, it wasn't hard to obtain. I recently got approved through Roadloans at 18%. I had several charge offs on my credit and hadn't paid in over a year on a few accounts, about 5 months on all the others. I did have one current auto loan though, one year from paying off, and another paid off auto loan from almost 2 years ago. I think that helped. I was forced into buying a new car only weeks after I filed because my car was totaled in an accident. The rate kills me too; going from my old car loan which had 0% financing to the 18% is a real kick in the butt. But broke beggars can't be choosers I suppose.