2 years completed, 3 to go!

[Franco]

I just got the NDC email congratulating me about making it through two years, three to go! It's been one hell of a ride, and a learning experience for sure! I no longer eat out, well, except the occasional Chipotle lunch which is far far healthier than KFC or McDonalds. Feels good saving some $$$ per month, not much, but usually around $300 per month saved.

This Chapter 13 is SERIOUSLY a learning experience, and it's been one of the best things to ever happen to me even if that sounds odd. It taught me how to conserve, how to get the most out of everything in life not just money. Keep positive and keep moving forward!

Cheers y'all!!

[sophieanne]

Franco - Congratulations for making it to the 2 year point! It can be hard, but if you stay focused, budget and learn from the past you are on your way to success. It’s not always possible for everything to go smooth but it sounds like you’re on a very successful track. Good luck as your plan continues - you’ll be done before you know it.

[Franco]

Thank you! It's going to feel AMAZING when this is over and my Truck is payed off and I own it! No more financing vehicles for me lol.

[flashoflight]

Good job hitting the 40% mark.

Funny you mention eating out. I was already taking my lunch to work except for the occasional meal when COVID hit. My group went from eating at restaurants to eating in the office lunch room. Now I eat at home all the time and don't spend money commuting.

Although financing a vehicle is often a good idea pre-BK to pay for your newer vehicle rather than paying American Express, I'm done with financing cars as well.

[imtryingtho]

Good for you! We are just about to start here. I joined this forum for support and help working on our expenses. Our car and house won't be included, but I do believe our financial counselor is going to try and have us pay down my car even while in 13. He is kind of an extremist, but I guess we need that!

Eating out is such a thing of the past for us with COVID and I think that is going to help a LOT with adjusting. Actually, social distancing is quite budget friendly all around. My husband is working from home and our gas and tolls have been next to nothing now!

Keep us updated! Only 2 years and I can be where you are haha

[shipo]

I'm having to laugh about the whole financing a car thing; I haven't had a car payment since something like 2005, however, I have every intention of financing a new (or nearly new) car in the next year or so, and definitely within two years of my Chapter 13 discharge. Why? A couple of reasons:

1. Financing a car is a great way to improve your credit rating, something I very much want because my wife and I would like to buy a new home just after the two-year window for auto-underwritten mortgages passes in March of 2022.
2. I am one of those physically and mentally challenged individuals who never learned how to drive a car with an automagic transmission, and given how much more difficult it is these days to find a car with three pedals under the dash, I want to buy sooner than later, but without draining my savings account (see above; my wife and I need a downstroke for our new home).

I know a lot of folks are very credit averse coming out of a bankruptcy, but the fact remains, credit, properly used, is nothing more than a tool to improve one's situation, be it material, financial, or otherwise.

[justbroke]

I'm having to laugh about the whole financing a car thing; I haven't had a car payment since something like 2005,

Me, since 2014, but I'm itching to buy one!

[flashoflight]

There are rebuilder installment loan fintech like KikOff which takes only 10 minutes to apply and only requires $1 from a digital wallet per month that is funded from the $12 installment loan. An auto loan is a very expensive way to increase credit scores more than KikOff once you factor in depreciation even at 0% APR.

[justbroke]

You can also get a credit builder loan through most credit unions (CU). They'll fund the loan and then, as you pay, your available-to-withdraw balance increases. At least that's how several CUs work.

But you're right flashoflight, if you only need an installment loan on your credit profile, the credit builder loan is a good tool.

[shipo]

The primary motivation for the auto loan would be to buy a new(ish) car with a manual transmission before that becomes impossible to do. My current car, which is in great shape and most likely good for many more years, is 14 years old and has 170,000 miles on it. I figure I could keep it and buy say, an off lease CPO 2018 BMW 340i 6-Speed (the last year that car was offered with a manual transmission), and those cars should keep me happy for the rest of my driving life.

I'm not sure what benefit a credit builder loan would provide over a secured credit card. I have a secured car with a nice high limit, 1% cash back on most purchases, 2% cash back for gas and groceries, and 3% cash back for restaurant charges; that and they are paying interest (a tiny little bit) on the security deposit.

Or would it be beneficial to have a credit building loan in addition to a secured card?

[justbroke]

The benefit, shipo is that the credit builder loan is an installment loan which is a different type of credit. It is handled by the FICO score differently and many lenders like to see installment debt and how you handled that installment debt. It is a portion of the FICO score and could actually improve someone's score if they have no installment debt on their credit report.

The secured credit card is revolving debt and more specifically revolving (non-finance/non-store) credit card debt.

[shipo]

So I should search out a credit builder loan; got it. Any preferred financial institutions with products in this space?

Edit: I just found out a local credit union offers them, up to $3,000 for up to 24 months.

[justbroke]

Credit unions are the best for these types of loans. What they typically do it loan you the $3,000 (example) and deposit the proceeds into your share savings account. They then put a hold on that $3,000 for the term of the loan.

Then for each dollar of the loan you payoff, they release that $1. Other credit builders, such as SelfLender, don't release the money until the entire loan is paid off. (I used both SelfLender and my credit union.)

[flashoflight]

With the exception of Navy Fed SSL (Share Secure Loan), none of the CU products will let you pay ahead more than a month or so. You could try it anyway but the due date displayed in the CU software will change overnight back to the next month. If you do $3k at somewhere other than Navy Fed for 5 years, you will tie up that money for a long time. Many folks do the $3010 5 year SSL at Navy and then pay it down below 9% right away. You can't do that at other CU. To me it sounds like too much trouble when KikOff makes it super easy to rinse and repeat every 12 months. But either way is better than losing a boatload of money on a newer/new car.

[justbroke]

PenFed also allows that paydown.

If you just wanted to have an installment loan on your record, and pay ahead, PenFed seems to be the go-to credit union for that. I had one at PenFed. I deposited $2K into my share savings, and then did a share secured loan against it. After (key) the first billing date, I paid back all but 9% of the loan. My next due date changed to somewhere in 2021. (My loan was in 2018 with a 36 month maturity.) It was awesome.