I must be the exception to stay and pay for car

[yang0837]

I filed for bankruptcy in August 2010 and was discharged October 2010. I have been current on my car payments and have not missed a single payment, $484 on my 06 Mazda 6. I did not reaffirm my car during bankruptcy because Wells Fargo would only knock off $20 for the reaffirmation. Since my schedule J was already $175 negative with the current payment, my attorney counseled against reaffirming.

Fast forward to Monday...when I got a letter from Wells Fargo asking when I could surrender the car since I did not reaffirm. As I said before, I have not missed any payments or made any late payments--insurance is also current on the car. I called Wells Fargo on Tuesday and spoke with the Bankruptcy Case Handler who stated that in order for me to keep my car, I had to pay the remaining balance of $9000. She was very nice and apologetic but insisted that despite my good standing with payments, there was nothing they could do.

I was shocked. I definitely need a car, but I don't have 9k just lying around and there's no one that I can borrow it from. I took half the day to think over my options...applying for a loan, refinancing, buying a new car? I honestly did not know how I would be able to do any of those things considering that my recent bk filing and discharge.

Finally, after doing lots of number crunching and weighing my options, I decided to apply for a loan to buy a car. I really did want to keep my car, but the mounting maintenance (insanely expensive tires, brakes, and everything else in it), gas guzzling, and not so great winter maneuvering were stacking up against keeping the car.

I was too chicken to go to a dealership, so I applied for a car loan on car.com on Wednesday night. A rep from my local Toyota dealership called and confirmed the loan on Thursday morning and pre-approved me for an $18k loan. I totally forgot to ask for the interest rate, but was just so confused and shocked over even qualifying for anything. I made an appointment for Friday to test drive some cars.

Before I went though, I looked at some cars on their website and did some more budgeting. Although I was pre-approved for the $18k, I knew I would more comfortable in the $13-$14k range. I made a list of wants vs needs in a car and narrowed my selection down to two cars.

When I got to the dealership, the rep had all the paperwork ready and brought the two cars I wanted to test drive around. I ended up buying the first car that I test drove, an 09 Toyota Corolla, 30k miles. My loan total, 60 months @ 15.5% , including tax, title and $750 down payment was $13,140. My new car payment will be $330! I intend to pay the $484 that I was paying for my Mazda so I can payoff the loan quicker, but I figured it wouldn’t hurt to have the smaller amount over a longer loan period incase of any emergencies that I could use the extra $154 for.

I was absolutely blown away that I qualified for anything, let alone the fact that the interest was 15.5%! It’s definitely high, but not in the 20’s (which I had assumed I would get and had also budgeted for).

As for my Mazda, I left it at the Toyota dealership. The sales rep said that it would be fine to leave it and call to Wells Fargo on Monday to have them pick it up there.

Whew! What a week this has been!

[despritfreya]

So, what you are saying is you just told Wells Fargo to go stick it. Now, instead of making money on a performing loan, the bank will take a hit when it auctions off the collateral. Good for you!

On the other hand, the new lender is going to make a mint at 15% interest. Love how this world works.

Des.

[clevelandmom]

I think that's great Yang! Good for you! We are currently trying to redeem a Ford, but don't quite know yet if the numbers will add up. If not, I know we will be able to get something else. I think it's great that you have a newer car for a lower payment. No THAT'S a good week! Congrats!

[Charlie777]

Typical short-sighted bank. They'll be lucky to clear half the $9K.

I do think it may be worth trying captive lenders - especially Ford if you haven't BKed them - they want to sell cars. I went through the "you didn't reaffirm" nonsense with Toyota - they didn't try to force a repo but claimed they never got notice of the BK or would have tried to force reaffirmation. I let them have the car and got an 09 Fusion, certified used at 10.49%.

[MeLLE159]

Yang, don't forget to put your approval in the buying a car approval thread! Congrats! How long ago were you discharged?

[yang0837]

I was discharged at the end of October in 2010. It's only been about 2 and a half months.

Thanks guys! 15.5% is double the rate I was paying before, but I made a smarter choice about the purchase price and am looking forward to pay it off before the 60 months.

I forgot to mention that my credit score was in the 590 range post bk, 570 Experian, 623 Transunion, 599 Equifax.

[MeLLE159]

Cool! I checked out that site where you went. Did you apply for financing right on that site?

[yang0837]

Yes. I put in the necessary financial info that any dealer or bank would need, and then submitted. When the dealership called me, they had already lined up three banks for possible loans.

[MeLLE159]

Thanks for the info! I will be looking for a loan after my discharge b/c I'm not reaffirming a vehicle!

[chicagoannie]

Thanks so much for posting about your experience with the car situation. Very helpful! And I think it was very smart of you to get a newer car for the lower payment.

[mommi2many]

I have a car loan with Wells Fargo. I have not been discharged yet, but should be any day now. I did not reaffirm, but did call and ask the bk dept if they required me to reaffirm. The rep said "no, we do not want your car." I am also current so we will just see how this plays out. The way I see it, signing a reaff is not in my best interest and I will take a chance on a ride thru or not. I'm rolling with the punches. It's just a car and there's another one out there if they want to be that stupid.

Good for you that you didn't let them bully you. Congratulations on your new car purchase.

[yang0837]

I finally got a hold of Wellsfargo today!!! OMG, for wanting their car back and sending two threatening letters now, they are sure hard to get in touch with! I called the bk number on the letters and was on hold for nearly an hour and a half yesterday, three times! So I tried their regular number, and was given the run around before being transferred to bk department, and was on hold again for an hour. Ugh, someone finally picks up today after 25 min on hold. It literally took 30 seconds to get the info to them about where the car was and then that's it, home free.

[yang0837]

Just a quick update...Wells Fargo hasn't picked up the car yet, but they sent a "right to cure" letter today. I was sore from laughing because they offered to let me keep the car if I refinanced the remaining $9000 balance at 27%, with....haha...$1400 down!!! Terms were for 60 months (about $200 a month) or 36 months ($300 a month)....yea...like I'll get right on that.

Ooooh, and they also thanked me for being a loyal paying customer.