How to get a different vehicle?

[LostOne0069]

OK, I've just sent off the retainer check to my attorney along with the retainer agreement... so we should be filing in the next couple of weeks.

One of the things that we are going to do is give back our 2004 GMC Yukon XL as the attorney has said that he will not sign off on a reaffirmation for it... AND we figure that the $670/month payment would be better spent on two vehicles instead of just one.

So here's the problem. How do we give back the vehicle and get a different one? I know that we can get financing (at outrageous interest, I'm sure) after BK... but we only have the one vehicle, so obviously we need to get the new vehicle BEFORE we give this one back.

How are we supposed to do this? I mean, we can't take out a loan for a car now... we're about to file bankruptcy. Once we file... you can't take out a loan while IN bankruptcy.

Now, the only way that _I_ have been able to figure this out is that we would have to keep paying the payments on the Yukon all the way through the bankruptcy until it is discharged and closed... and then get another vehicle and give back the yukon.

The problem there is that I don't really want to pay $670/month for another 3-6+ months for a vehicle that I'm not going to keep!

Anyone have any suggestions?

[SinkingFast]

If you're doing Ch 7, ask your attny about 722 Redemption. It's a Creditor that extends auto loans to people in the process of filing Ch 7. They also sell vehicles. Kinda like "program" cars. But it has to be done while you're in the process of Ch 7. Once you're discharged, 722 Redemption cannot help you.

[LostOne0069]

So the 722 is post-filing, but pre-discharge? Do you do this before the 341 meeting or after?

Thanks for the clarification of this, I'll ask the attorney about it when I talk to him next.

[SinkingFast]

I don't quite know how it works, Lost. Just that Ch 7 filers are their market.

StaciMM got a car thru them when she and her hubby filed. They were replacing a car they gave up in the BK. She was very pleased with how it all worked.

Other people have posted here they've tried them. Some have been approved and others were turned down. So it's not a guaranteed thing.

[misslovanu]

I was one of those turned down... I don't know why though. Are there any other alternatives?

[LostOne0069]

Geez... we've checked through everything we can... and using the 722 thing you're looking at 24% interest... so a $10,000 car would cost us over $400 a month and end up very rapidly upside down on... not to mention that it'd be out of warranty and we'd have extra repairs.

We could probably get a somewhat better rate by just waiting until the bk was completely done and buy one through a normal lender... but we'd still probably be in the 14%-18% range... AND we'd have to keep paying the payments on the existing vehicle until we got the new one anyway... which would pay the loan down several thousand dollars depending on how long it takes to get fully discharged and closed on the bk.

We're starting to think that keeping the existing vehicle is going to be the best thing to do, $670/month payment and all.

[iupui1299]

Can you get another car before you file with a co-signer...and reaffirm that car or would that destroy the co-signers credit?

[LostOne0069]

nope, no co-signers. I WON'T do that.

I don't worry about defaulting on a loan or doing anything stupid like that... but I'd rather pay the 24% or the $670/month payments than have anyone co-sign for me for a loan.

Thanks for the suggestion though!

[SinkingFast]

Even tho your attny won't reaffirm on this one, you can ride it thru the BK, and then arrange to trade it shortly after Discharge for something with lower payments. Maybe??!!

[LostOne0069]

Well yes... but my point is that by that time it would be just as worth it to keep it! We got a VERY good rate when we bought it two years ago (4.45%) and over $500/month of that $670 payment goes to principal. We've owned it for two years now and have 60 months left (yeah, 7 year loan). If we bought a used mini-van for say $15,000, at 24% interest you're looking at $432/month payments... on a MUCH less quality vehicle that is probably out of warranty. With it being out of warranty we'd also probably have to get a second vehicle to make sure that I always had transportation if it broke down. (I get free loaners with the existing vehicle). That would bump the payments up even more. Granted, this option would also give us two vehicles instead of one... but those vehicles would be of lower quality... and would also end up upside-down on the loans almost immediately due to the higher interest rates. It would be nearly impossible to get rid of them and get something better until they were paid off.