Frustrated...open CH13 but co-signer and still can't get a loan?

[jennhalcyon]

I wish I had known better 18 months ago when we were halfway through our lease and about to file for CH13...I should never have listened to my atty when she said we'd be able to get a car loan. "Oh, you'll have no problem getting approved...you'll be debt free and you'd probably get approved faster than me!" she said. Of course we expected a higher interest rate, but we truly believed we would be able to get financed. Now our lease is ending in DAYS and the only thing we got approved for was ROADLOANS at 16.9% without our father-in-law co-signing.

We are just trying to buy out our van lease, so no dealership will make very much money on us. Chrysler said to go to our local dealer, who say they have been "trying" for 2 days to get a bank to work with us with our "difficult" situation. Applied on Lending Tree and only got one match, RateGenius, who just emailed this morning that they cannot work with us.

Should it be this difficult? I know we are in an active 13 but we have good income and a near 800 Fico co-signer! Any ideas? Will a Roadloans dealer even do a lease buy-out?

Thanks,
Jenn

[Kuya]

It has been my experience that banks simply don't want to touch you with an open 13. Their argument is that it is very possible that your 13 could get dismissed at any time along the way. If you get dismissed - all bets are off and you will probably spiral down once again. But worse, they fear that most chapter 13's either FAIL or convert to a 7 along the way. This could mean that there is high potential for them, if they give you a new loan, to get sucked into your converted 7.

Now, not everyone fails or converts . . but majority do, so the banks have a valid point.

Co-signer or not - most lenders have a standing position: NO NO NO to anyone with an open BK.

You may have a better deal - turning in your lease and opting for purchasing a used car. Roadloans did approve me when I applied on their website with an open 13, but the interest was a whopping 20%, so I turned them down. I at least, had the option of car pooling and finding rides until my 13 discharges.

Once you have a discharge, many more options will come available for auto financing. Until then, you are fed to the sharks.

Unfortunately, that is one of the hardships of a 13 vs 7. In a 7, you can get a loan within a few months. 13's have 5 years of burning in hell first. Go figure. They really need to change the way things are. It feels as if you are punished harder in a 13, even though you are paying a large portion of the money owed back.

[AngelinaCatHub]

It has been my experience that banks simply don't want to touch you with an open 13. Their argument is that it is very possible that your 13 could get dismissed at any time along the way. If you get dismissed - all bets are off and you will probably spiral down once again. But worse, they fear that most chapter 13's either FAIL or convert to a 7 along the way. This could mean that there is high potential for them, if they give you a new loan, to get sucked into your converted 7.

Now, not everyone fails or converts . . but majority do, so the banks have a valid point.

Co-signer or not - most lenders have a standing position: NO NO NO to anyone with an open BK.

You may have a better deal - turning in your lease and opting for purchasing a used car. Roadloans did approve me when I applied on their website with an open 13, but the interest was a whopping 20%, so I turned them down. I at least, had the option of car pooling and finding rides until my 13 discharges.

Once you have a discharge, many more options will come available for auto financing. Until then, you are fed to the sharks.

Unfortunately, that is one of the hardships of a 13 vs 7. In a 7, you can get a loan within a few months. 13's have 5 years of burning in hell first. Go figure. They really need to change the way things are. It feels as if you are punished harder in a 13, even though you are paying a large portion of the money owed back.

kuya makes sense. I have purchased some pretty nice beaters for 1 to 2K. Buy from an individual. There are many distressed people who would love to dump the extra car to make a mortgage payment. It is poor form to ask anyone to be a cosigner. I got burnt and will never do that again. 'Hub