I need $7k to buy a car the day after discharge

[debtmonster]

I currently have a 2007 Saturn Ion that I owe $13k. It's currently worth only $4900-6500 via KBB. If sold at auction, I'd bet they'd be lucky to get $4,000 to $5,000 for it as it has high miles (over 64,000). Anything over 50k miles makes it usually not be included in "Certified Used".

Everything on this car seems to work okay other than the power window has stopped working and because of the miles, it can't be fixed under warranty. Only the drivetrain is covered to 100,000 miles.

I would rather give this car back and buy a late model Honda or Toyota for no more than $7500. On AutoTrader I found a ton of Honda's and Toyota's from 2001 and up with under 75,000 miles.

In a perfect world, I'd like to borrow $7500 from someone or some place and pay back $1,000/mo. After seeing numerous web sites, I see B.S. of "pre-payment penalties" and some places want you to have longer terms so they can make their high interest.

The problem is that it would take me too long to save $7500 cash right after a BK discharge. I don't want to pay high interest over long term. I don't want to pay $12,000 for a $7,500 vehicle. What does one have to do to get $7500 and pay back maybe $8000 in the long haul? Is this possible?

Our other option is to re-affirm the vehicle and then I'll end up paying back double what its worth. I'd rather get a Honda or Toyota that is loaded for about what I owe now. I found a nice 2001 Toyota Sienna van with 57,000 miles for $7300. Since we'd be giving back the SUV in the BK, we would need something big enough to carry stuff. That mini-van would work out great (even though I am not a mini-van person.)

AutoTrader has a ton of great looking cars on there from dealers and private sellers. Another car I found was a 2003 Honda Civic with 58,000 miles for $3900. There's lots of gems in the rubble if you dig through all of the wrecked vehicles. Sometimes you'll see something that looks good to be true only to find out that after you clicked on it, it was wrecked. Sometimes you can find people who want to sell quick or people who don't know the trade-in values of their vehicles.

[BK2008]

Have you filed BK yet??

I went out and financed a $7K car @7.25% right before I filed, and before my credit went to hell. Because I knew I was going to give up my honda that I owed 30K on, and I didn't want to get stuck.

So that plan worked out for me ok, no high payments, no prepay penalty, no high interest. Best part...is the car is worth more that I purchased it for. Check NADA.com for values, that is what the dealers typically use to value trade in's. It is vastly different than KBB, I found out.

Maybe that plan would work for you.

[debtmonster]

I have two cars in my name with a FICO of 565 along with two recent repo's. Nobody will finance me a 3rd car while I have two current cars in my name. Both of them will have to go back first and be out of my name on the credit report.

When I had semi-decent credit, our BMW was 10% financing.

We just started paying the attorney this month. The filing with the courthouse probably won't be done until March to May of 2009.

[Keebler]

I don't know if it'll work for you but www.prosper.com is peer-to-peer lending. All loans there are uncollateralized and you can be successful with a high enough interest rate. The term is 36 Months and I'm pretty sure there's no prepayment problems so you could refinance whenever you like.

There's only two states that make Prosper a problem. In Texas, the interest rate is capped at 9% so only those with pristine credit even get loans funded and in South Dakota Prosper can't lend money at all. In all other states you can make up for an unappealing credit score by agreeing to a high interest rate.

While you wouldn't want to use Prosper before you file, you could use it right after you file and haven't been discharged yet.

[debtmonster]

Peer to peer lending sounds a great idea as long as they will do it after a BK. Being that the money comes from an individual, I would back my back trying to pay this back vs. paying back some rich bank.

[Keebler]

Peer to peer lending sounds a great idea as long as they will do it after a BK. Being that the money comes from an individual, I would back my back trying to pay this back vs. paying back some rich bank.

The funds come from several individuals, sometimes just $50 at a time.

I tried it right after filing to replace a vehicle I was surrendering and my credit profile was crappy. I tried again after I cleaned up my scores a bit. Mine is one of the few states that caps the interest they can charge and there's not too many people willing to fund a 9% loan to someone with "D" credit. If you're willing to pay a high interest rate and can write up a compelling listing, you'll have half a chance.

[debtmonster]

I am willing to pay high interest as long as it is on a loan under $10,000 and 36 months. I plan on paying it back fast so the interest rate doesn't matter. If all goes as planned I want to pay $1000/mo. until it is paid off. I can do this as long as we are staying in the house rent free for a year or so after the BK.

[debtmonster]

Prosper.com ain't helpin'

I just went to prosper.com and tried to join and their web page says:
"We're sorry; we are unable to fund your loan at this time. However Prosper has an agreement with a trusted partner who will work with you to determine if you can get a loan. "

This is NOT good news. Their web page states that they will not fund anyone with a FICO score under 520. My Equifax is 584 right now. By the time I go BK, it will be way down in the 400's once everything is discharged.

This means that I will have to re-affirm my Saturn and I will end up paying double what it is worth.

If I went bankrupt, I'd have all of my cash available to finance a $12000-14000 used car with no problem. These people are KILLING US with their lame rules!

I am going to be sooooooooooooooooo up the creek without a paddle, it's not even funny once they take both of our vehicles. We live 30 miles out into the middle of NOWHERE. It is 100% impossible to survive out here without reliable transportation. A $500 beater car will not solve the problem. If you get stuck between here and town, there's no cell phone coverage.

My wife is going to be so livid when she finds this out. I was showing her some nice used Acura SUV's that we could buy for the same price of a brand new Hyundai Elantra or Nissan Versa. Remember, she's SUPER picky about a used car. This is the first time in over a year that I got her to open up to even think about buying a used car. It would cost a good $100+ per cab ride to go back and forth into town.

[debtmonster]

I think I found out why I was turned down by Prosper.com. It wasn't so much my credit, but it looks like many of these Peer to Peer lending sites are shutting down... something to do with the SEC.

Check this out:

http://seattlepi.nwsource.com/business/384022_peerlending20.html

That's very bad news for many of us who will need to buy cars and use services like Prosper.

[b_girl]

Yeah, I went there yesterday after Keebler posted that link. It basically said you could try to apply, but they are in the midst of some kind of review and it could be months before they are actually up and running again. Have you considered doing a 722 redemption? Yes, the interest sucks, but they do state that if you have a good payment record for 12 months, they will cut your interest at that time. You can also refinance elsewhere without fear of a prepayment penalty.

[debtmonster]

Yeah, I went there yesterday after Keebler posted that link. It basically said you could try to apply, but they are in the midst of some kind of review and it could be months before they are actually up and running again. Have you considered doing a 722 redemption? Yes, the interest sucks, but they do state that if you have a good payment record for 12 months, they will cut your interest at that time. You can also refinance elsewhere without fear of a prepayment penalty.

I don't want to keep the car. It's too upside down. That's why I wanted to buy a new vehicle that has already depreciated. We found some nice 2004/2005 Acura MDX's for $12000-13000. That's CHEAP as these same vehicles were pushing $40,000+ new! I'd be getting them for nearly 1/4th the price. And Acura is very reliable. I was hoping to get a $13000 loan and pay like $300/mo. That turns out not to be the case at all.

[b_girl]

You can also use the 722 Redemption for a replacement vehicle...that's what we did. There are rules about which vehicles will qualify, but it's worth a check.

[debtmonster]

You can also use the 722 Redemption for a replacement vehicle...that's what we did. There are rules about which vehicles will qualify, but it's worth a check.

Cool... I didn't know a 722 Redemption could do that. Why do they call it a 722 Redemption then if you're not redeeming the car?

I learned my lesson. I want to buy a car that already took the brunt of the depreciation and is still like new. I'm in the middle of taking the depreciation now and want to include it in my BK.

[Cali]

I always thought a 722 was for a vehicle you already had. I didn't know you could go get something new.

[Ugh07]

These people are KILLING US with their lame rules!

Lame rules like not giving credit to people who have shown they wont reliably pay back what they owe? Credit is not a right, nobody "deserves" credit like marketers would have you believe, lending companies are going out of business left and right because of loose standards, the ones that are left need to protect their shareholders.