BK is not worse than bad credit...

[brad10281]

I've been discharged for 3 months as of today. I recently financed a vehicle to help rebuild credit and replace an old clunker that was about to die. I got a really decent rate (7.2%). I found out that someone I know recently financed a vehicle for close to the same price as mine and is paying $100 more-per-month on a loan that is 2 years longer than mine. Rumor is that this person has bad credit, I've never had bad credit until I lost my job and filed for bankruptcy. How does someone become so lazy that they can't pay their bills on time? Supposedly this person isn't struggling to pay their bills, they are just lazy and pay them late all the time. I think this person is in their late 20's, I sure hope they change their ways soon.

Lesson: Pay your bills on time!!! (if you can)

[mgs0987]

umm, if people were paying their bills on time do you think they would be posting on a bankruptcy forum?

[epiphany]

I've been discharged for 3 months as of today. I recently financed a vehicle to help rebuild credit and replace an old clunker that was about to die. I got a really decent rate (7.2%). I found out that someone I know recently financed a vehicle for close to the same price as mine and is paying $100 more-per-month on a loan that is 2 years longer than mine. Rumor is that this person has bad credit, I've never had bad credit until I lost my job and filed for bankruptcy. How does someone become so lazy that they can't pay their bills on time? Supposedly this person isn't struggling to pay their bills, they are just lazy and pay them late all the time. I think this person is in their late 20's, I sure hope they change their ways soon.

Lesson: Pay your bills on time!!! (if you can)

Huh?

ep

[rck3]

umm, if people were paying their bills on time do you think they would be posting on a bankruptcy forum?

Ummm, yeah. people get in bad situations, it doesn't mean they are always poor with their finances. I have not missed a payment of anykind in 10 years but here I am posting. Life takes turns and problems come up, I am on here posting as I know where I am headed in 2 or 3 months so I am looking into my options before I am in trouble. It's simple planning. I feel bad for people who do not have the foresight to understand their situation and make choices sooner than later. Later just means you put yourself through unneeded stress and trouble and let a smaller issue turn into a bigger. I could wait until I am 5 months behind on everything but all that would do would cause me to owe people more money I would not repay. I am trying to limit their loss and get myself out of a bad situation by addressing it now.

[mgs0987]

Point being....it doesn't matter if you pay your bills on time...if you're going bankrupt then your credit is probably just as bad if not worse than the guy who pays late all the time. Theres pros and cons to each, thats all I'm saying.

[helpmeout]

How does someone become so lazy that they can't pay their bills on time?

Lazy? What a very judgemental statement. It's also an ignorant one.

Lazy? I didn't pay my bills on time because, well, because there wasn't enough money to go around. I had to pick and choose what got paid. There was nothing lazy about it.

Plus, there's the pesky little fact that you don't know everything that is going on in that person's life. You are just Assuming.

[Flamingo]

umm, if people were paying their bills on time do you think they would be posting on a bankruptcy forum?

You post on a bankruptcy forum because you are either planning on filing bankruptcy or have filed bankruptcy. I and many others on here did not have one late bill up to the time we retained our attorney and were advised to stop paying.

To the OP - BK and repossession are the worst things one can have on their credit report but you are correct that certain things on one's credit report before filing (i.e., not having any late payments or chargeoffs before filing) does help and what also helps as to a car loan is having previous paid off, paid on time vehicle loans where you shop for a car (i.e., Ford Credit, GMAC, etc.). That is a plus but there is still no guarantee one will get a favorable loan. Your 7.2% car loan is not a good rate because others on here have gotten better rates, even 0% financing. In fact, 7.2% financing with all the good deals out there for someone with good credit is an awful rate so realize your BK did affect you situation.

[StartingOver08]

Flamingo, it is not possible to determine the quality of the deal without knowing all the terms of the deal AND without knowing the details of the vehicle (age/milage/condition etc).

It is well known that the zero percent deals are not all that they are cracked up to be because the price of the vehicle is the highest possible price (the vehicle is actually priced to account for the 'lost interest'). In other words, you pay more for a vehicle priced at zero percent interest then you do if you pay market interest because a dollar amount for interest is tacked onto the price of the vehicle. That is why you have the ever popular cash back option on that same vehicle if you finance it for the market rate. Do the math. The dealer has done the math and they make more off you with a zero percent interest rate than with the cash back option and market rate.

As to the 7.2%, it certainly beats all the 23% rate and other extremely high interest rates I see posted here by others AFTER their discharge! Then again, if its 23% of $X over the course of 12 months its not as bad as those that sign their life away for 72 months after their discharge.

My point is: you have to know ALL the terms to determine if it is a 'good' deal. To come out and say that it is a bad rate is very poor form and beneath you. We don't have enough information about the deal to make any sort of judgment or determination.

[rck3]

I do have to agree with Flamingo, for a non BK person 7.2% does suck. Current rates can be found in many places below 4% so your BK is causing a large increase but no not as bad as many other people which goes to show that just a BK alone is not the sole factor. As for zero %, that's not always true that the deal jacks up the price. If you negotiate well, it can have very little effect

[flyinbroke]

And the OP filed a 7, which nukes your rating immediately but also allows you to climb out of the hole immediately by rebuilding credit. If you are in a 13, you don't have that luxury. If a 13 is all you can get, it may behoove many to weigh out whether a few credit dings are going to be worse than five years of not being able to make any financial moves without money-daddy's say so, and not being able to get the financing for a new house/new car because you are paying on a 13.

Not all who can't pay their bills are lazy...after all, OP, you filed for BK. You are making assumptions about the person with credit dings; the word "supposedly" gives it away. Can we assume that you did not look hard enough for a replacement job and were thus lazy? Or perhaps bad fortune hit both you and the younger person with dinged up credit.

PS: My CU is giving car loans in the 3 percent range. 7+ percent is not good at all.

[brad10281]

OP here, you all make good points. All my information is second hand so you are all right...I'm "assuming" that her income is good and that she just doesn't pay her bills on time. I wasn't trying to belittle her at all, I was just surprised when I heard about her loan terms.

For me personally, I never thought I would be in this situation but it has opened my eyes. I used to live well beyond my means and it won't happen anymore. I was able to sustain my life style on my previous income but once that disappeared I quickly realized just how uncertain the future is.

Maybe instead of making stupid posts like this I should spend my time giving seminars on how important credit is and living within your means. Thanks for all the comments (bad & good)!

Oh, and about all the comments on the 7%+ interest rate, I know its not good but its a lot better than what I was expecting after a Ch7. I was just thankful that I was able to get financed period!

[StartingOver08]

...

PS: My CU is giving car loans in the 3 percent range. 7+ percent is not good at all.

My CU too. But not until 2 yrs out of BK. Every CU has different policies. If you can get 3% with a BK on a regular vehicle purchase 3 months out of BK (like the OP) then that is great! Post the CU name

As to the rest of your post - I agree. We don't really know the back story of anyone here..do we?

[flyinbroke]

I have not tried to buy a car yet. I am one who preferred some dinged up credit...five defaults/COs (out of about 45 accounts reporting on my CR) will hurt me less than a CH13 will. And the way the CAs are acting may well cancel out the debts (Have three lawsuits against three CAs representing 4 of these accounts...one offered to settle though the OC owns it still. Lawyer is going after the OCs for their agents' offenses.)

I am willing to bet I get offered a crappy rate at this juncture, but in a couple of years no one will care about dings or BK the way this economy is going...the artificial "improvements" through tax breaks are not fooling most.

[Flamingo]

Flamingo, it is not possible to determine the quality of the deal without knowing all the terms of the deal AND without knowing the details of the vehicle (age/milage/condition etc).

It is well known that the zero percent deals are not all that they are cracked up to be because the price of the vehicle is the highest possible price (the vehicle is actually priced to account for the 'lost interest'). In other words, you pay more for a vehicle priced at zero percent interest then you do if you pay market interest because a dollar amount for interest is tacked onto the price of the vehicle. That is why you have the ever popular cash back option on that same vehicle if you finance it for the market rate. Do the math. The dealer has done the math and they make more off you with a zero percent interest rate than with the cash back option and market rate.

As to the 7.2%, it certainly beats all the 23% rate and other extremely high interest rates I see posted here by others AFTER their discharge! Then again, if its 23% of $X over the course of 12 months its not as bad as those that sign their life away for 72 months after their discharge.

My point is: you have to know ALL the terms to determine if it is a 'good' deal. To come out and say that it is a bad rate is very poor form and beneath you. We don't have enough information about the deal to make any sort of judgment or determination.

Well aware of all this but 0% financing on a former Saturn of which prices for all were non-negotiable and qualifying for their advertised rate with a recent BK on one's records beats all, even if you took the rebate or lower financing offered of 1.9%. All situations are different but with all the below 3% financings out there, anything above that amount would indicate spotty credit and going higher toward 10% would indicate really bad credit. Fees were probably upped somewhere else to get the 7.2%. The OP thinks he got a better deal because he did better than someone else but reality will set in eventually.

[mermaids614]

To the Original Poster, how dare you call someone lazy because they have bad credit? I earned my Bachelors Degree at 23 years old and will have a Masters degree soon. I have always worked 2 jobs, even through college and I'm still working 2 jobs today. How is that lazy? I have said it before and I'll say it again, I never lived off credit cards. I wasn't one of these people who charged thousands and thousands of dollars in trips, luxury items, handbags, electronics, plastic surgery, boats.............So I resent that statement. There are people on this board who appear to never have experienced paying for a tank of gasoline with cash........I'm not one of those people. Regardless of why you filed bankruptcy, bottom line, we all filed, so the details really don't matter. How do you know the details of this person's finances anyway? Perhaps you should spend more time worrying about your own business instead of judging others. You have a bankruptcy on your credit report.