Buying a car post bk what's best?

[kl030505]

My husband needs a new car - BADLY. Based on my projection, shortly after discharge I could have around $3K for him to purchase a used car in cash. For now, I don't want to invest in a large car payment or anything, I'd rather work on building our savings. His $1K car has lasted almost 2 years. If we can get that long out of a $3K car we should be in good shape later on to get a nicer used one.

My question is, do you think it's worth it to go ahead and try to get a SMALL car loan right after the bankruptcy in order to rebuild credit even though we'd be spending a fortune in interest rates? We really can't wait 6 months post discharge to buy him a car. He honestly needs one now, but we have to stretch it until February. We could potentially try to get a $5K car and put $2500 or $3K down and then do a loan for the rest (even though the interest rates will be ridiculous).

I really want to get to work on rebuilding credit as soon as possible (particularly in his name as his was never very good to begin with), but I'm torn about paying a double digit interest rate for a lousy $2500. Would it be better to get a secured card or something and just make small charges every month and pay it off? Would doing that PLUS a car loan improve the credit rating faster? I will have a reaffirmed GMAC lease in my name, so that should help some...

Any thoughts or advice would be greatly appreciated.

[BassBoy]

Of course it's always better to wait until after your BK is discharge. The general rule is never take on new debt while in BK. Not to mention, it's very difficult to obtain credit while in active BK.

Auto loans after BK are not that bad. Sure there are the 20-some % auto loans, but there are plenty that are not. Keep in mind that most lenders have a minimum loan amount, so you may not be able to finance $2K or $3K.

As for rebuilding, having an auto loan and a CC is a good place to start. Just do what you can afford and manage.

[NOMOREBADCREDIT]

i tried to get auto before my discharge and didnt get approve.

[floorman]

Capital One Auto Finance did a loan for us a few months post bk7 with a decent interest rate. www.capitaloneautofinance.com

[kl030505]

Looks like we are going to have to buy one before we file. In order to maximize the time in the house, we won't be filing until the day before foreclosure in order to put the automatic stay into place. So, since it will be another month or two before we file, we have to buy something soon, since we can't really do it after filing before discharge.

So, I'll just get a junker in cash and worry about rebuilding credit after discharge.

So ready for this whole process to be over.

[SinkingFast]

As you shop around for your "beater to do you for a while",......... Keep in mind your Vehicle Exemption for BK purposes.

You don't wanna spend more than you can cover with Exemptions in your BK paperwork.

[kl030505]

As you shop around for your "beater to do you for a while",......... Keep in mind your Vehicle Exemption for BK purposes.

You don't wanna spend more than you can cover with Exemptions in your BK paperwork.

No worries! We met with our attorney on Friday and I pretty much have $10K in exemptions to play with since we are not keeping the house. We don't have any assets (no 401K or IRAs or anything), so the exemptions will be whatever is in the checking account, our tax refund if we will get one, my e-ring and the car (my car is a lease). We won't be able to afford more than about $2500 max, and his current car will be going to the junk yard (1992 VW Jetta with something like 200K miles), so I'm not terribly worried. We spoke to our attorney about it and he feels confident it won't be a problem.

[sickandtired8]

We waited until after our 341 meeting and got a Trailblazer with 8000 miles on it at 12.5 percent interest. It cost 19,999. It is a 2005. So it is not impossible. Good luck! S&T

No worries! We met with our attorney on Friday and I pretty much have $10K in exemptions to play with since we are not keeping the house. We don't have any assets (no 401K or IRAs or anything), so the exemptions will be whatever is in the checking account, our tax refund if we will get one, my e-ring and the car (my car is a lease). We won't be able to afford more than about $2500 max, and his current car will be going to the junk yard (1992 VW Jetta with something like 200K miles), so I'm not terribly worried. We spoke to our attorney about it and he feels confident it won't be a problem.