Auto Loan Before CH7

[DebtStinks]

So we have 2 very old cars (1996,1998)... one doesn't run and the other is on it's last leg. I think we are probably going to file for CH7 in June but need to get a better car since my job requires me to commute out of town often.

We could prob wait (roll of the dice considering the condition of the cars) until the CH7 is discharged but from what I've read the interest rates would be pretty bad. I went ahead and tried to apply though roadloans and we got approved for a loan at 9.49%.

Would it make sense to get our car now and reaffirm in BK instead of waiting till after? Does anyone have experience with this?

Thanks

[dogbone33]

YES!!!! Get a car before you file.... I has been impossible for us to get a loan. We were going to get a new truck before but we didn't cuz we didn't know we were filing. So now we are stuck.

[pcn]

Stupid question, I'm sure, but how do you qualify for a new car if you are in the condition to require bankruptcy? We need to do the same, but since we are maxed on credit, can't. To get a loan, you have to show disposable income. If you have disposable income, how can you qualify for bankruptcy?

[taramaxed]

Stupid question, I'm sure, but how do you qualify for a new car if you are in the condition to require bankruptcy? We need to do the same, but since we are maxed on credit, can't. To get a loan, you have to show disposable income. If you have disposable income, how can you qualify for bankruptcy?

Not a stupid question. I think you still have to qualify traditionally to get a good rate. I know there are car loans for everyone though. If you credit is bad now then I guess it wouldn't matter if you buy one now or after filing. In our case we are looking to buy one before we file so we get a good rate. A couple lawyers we spoke with think we will have trouble with the credit union our current car is through so we are just letting it go. But, our credit is still good right now. If it wasn't we would just wait until after we file. Why make payments sooner than later unless you have no ride and need a car.

[DebtStinks]

Fair question... my wife and I are down from 2 incomes to 1. Our house has lost over 50% of it's value in the last 4 years and we are upside down around 200k (more than it's currenlty worth). We have always kept enough of a savings account to keep us going for a few months but we are in the red around $1,500 per month so it won't last much longer. But as of right now I haven't missed a single payment on anything and our scores are 700+ (but our DTI is very bad).

The end is near but I'm planning ahead instead of waiting till the buzzards are circling.

** Also a lot of the debt is in my name we went for a loan that is just in my wife's name. We plan to reaffirm this loan and we won't stop paying on it.

[dogbone33]

We had tons of DTI also but got approved for a higher rate and payment. Our credit was in the high 700s, but still couldn't get a decent rate with all of our debt. We didn't know we would be filing bankruptcy so we didnt get the truck. I kick my self in the rear everyday....

[pcn]

But as of right now I haven't missed a single payment on anything and our scores are 700+ (but our DTI is very bad).

The end is near but I'm planning ahead instead of waiting till the buzzards are circling.

Thanks. My question may not have sounded like I wanted it to - not questioning your motives, but really wanting advice. We are in similar situation, I think, but with not quite as good credit (680 o so). I tried to get a loan against one of our used vehicles in an attempt to "protect it" by reducing our equity. (Another choice was to try to get newer car to replace our oldest vehicle before filing.) I was told that even though our credit scores were still good, we had too much debit to income, so we couldn't qualify. Would things be different/better if we tried the new car route? Are new car dealers more lenient, even with the economy like it is? Thanks for your input.

[dogbone33]

Thanks. My question may not have sounded like I wanted it to - not questioning your motives, but really wanting advice. We are in similar situation, I think, but with not quite as good credit (680 o so). I tried to get a loan against one of our used vehicles in an attempt to "protect it" by reducing our equity. (Another choice was to try to get newer car to replace our oldest vehicle before filing.) I was told that even though our credit scores were still good, we had too much debit to income, so we couldn't qualify. Would things be different/better if we tried the new car route? Are new car dealers more lenient, even with the economy like it is? Thanks for your input.

It won't hurt to try. But as I said our credit was good but had to much DTI. We could get a loan but at a higher rate.

[DebtStinks]

Carmax is pretty good. We stopped by a Kia dealer and they wanted 14.4% on a loan. So we drove down another hour to a Carmax and in 2 hours walked out with a car at 7.25% interest. We can dump our 2 junkers now and at least know we are locked into a decent car.

Thanks for the advice all... it worked out well.