Roadloans- pre-filing?

[adm]

We are getting ready to file. Atty running numbers but I think we are just over qualifying for a 7, so we'll have to do 13.

High DTI and spouse unemployed.

Our 2nd car has 200K miles...concerned about it's longevity & filing ...so last night I applied online as approved for roadloans at 12%.

Our other car payment is 353 (we are fine w/equity as we owe just about what it's worth), have emailed atty to see if another payment (not more than 250) is ok.

Question: I was reading the roadloan contract and it defines default as FILING for bk. Anyone have any experience with this? I mean we plan to pay this loan...will they really try to claim I'm in default and take back the car??!?!

[adm]

PS- also in rereading the paperwork and viewing the other roadloan threads...it says I can only have one carloan? Um, that won't work. We need 2 cars! So I guess I will go to lendingtree.com which I hadn't tried. I don't want to go to a dealer and apply for financing there. I was to go in knowing my financing situation-- and if they can offer me something better, then great

[SMinGA]

Well yes, filing bankruptcy is a form of defaulting on any loan. Does not mean you cannot file bankruptcy on the debt or that the lender can really do anything about it. Sounds to me like legal jargon to scare you.

If you wait a few months after taking on the 'new' car financing before filing, you should be fine. Even if the lender complained, my atty recommended 3 months to avoid appearing to have acted in 'bad faith'. He said its not likely for a lender to balk at it, but if they did the trustee/judge would almost certainly side with me as long as the vehicle is needed for reasonable transportation.

If you get 12%, unless your district has a low till rate & a low trustee fee, you'll probably be best to just keep making the payments as agreed and not have it paid in your plan. Since anything paid thru the plan/trustee incurs an administrative fee by the trustee, your 'net' rate would probably not be lower. (As an example, my district uses 5.5% for vehicle loans paid in the plan, and trustee fee is 5.4%. I did the math, and this pretty much mean my effect rate - considering the extra paid to the trustee by paying hte loan thru the plan - is 9.5% or so. Many districts charge more for the trustee fee, up to 10%.)

[adm]

Unfortunately it's not going to work out. I called and in order to keep my other car, I have to apply w/my husband (or co, but I'm not bringing anyone else into this hot mess!)....but he's unemployed. I put in his unemployment and we get denied....it's ironic that for BK they count UI as "income", the IRS counts it as income although b/c spouse did not find a job in 2009 we couldn't claim child care tax credit although kid2 in daycare FT (so spouse can look for work, it's required by UI!).

So no car loan. I just hope when the time comes spouse's parents will get the loan for him or something--

This whole process is so draining, with a feeling of hope on minute and depression the next :/

I now think we'll wait a bit to file (still haven't heard back from atty on 7 vs 13, although I suspect 13...) so we can try and save some $ for emergencies (needing new tires, etc). Plus we have to not pay cc's in order to pay atty, how ironic is that?!?!

[catleg]

If you go into the car dealer they have a computer that can put the application into a whole bunch of lenders. They will figure out a way to finance you. They also have tricks they can do like buy down the interest rate by a percent. Not the best deal, but if your credit is shot and you need wheels ... I got financed by Fifth Third Bank at 12% , later was able to get financing direct from a Toyota dealer at 9.99%.