Buying a Car after Chapter 13

[tkfourtwo1]

Hello All -

Long time reader, fist time poster. My wife and I received our Chapter 13 Discharge back on 12/14/07 after four long years. We have had one car that we bought before the bankruptcy that is now almost 6 years old with 135K miles on it. Add to that we now have three children we really need a second car.

I am in the process of cleaning up my credit report. My pre-cleaning scores were 674 through Equifax, 653 through Experian and 584 through Transunion (this had the most mistakes on it). We will be looking to buy something cheap (under 17K) towards the March time frame. Given that my pre-cleaning scores are not horrible and that they should go up some by March, am I in a position to just work with a dealership like i did pre-bankruptcy, or do I still need to deal with a bankruptcy-specialized financing department or even go the Cap One route? There is so much conflicting information on-line that I could use some advice. Thanks!

Filed Chapter 13 9/17/03
Discharged 12/14/07

[Flamingo]

Hello All -

Long time reader, fist time poster. My wife and I received our Chapter 13 Discharge back on 12/14/07 after four long years. We have had one car that we bought before the bankruptcy that is now almost 6 years old with 135K miles on it. Add to that we now have three children we really need a second car.

I am in the process of cleaning up my credit report. My pre-cleaning scores were 674 through Equifax, 653 through Experian and 584 through Transunion (this had the most mistakes on it). We will be looking to buy something cheap (under 17K) towards the March time frame. Given that my pre-cleaning scores are not horrible and that they should go up some by March, am I in a position to just work with a dealership like i did pre-bankruptcy, or do I still need to deal with a bankruptcy-specialized financing department or even go the Cap One route? There is so much conflicting information on-line that I could use some advice. Thanks!

Filed Chapter 13 9/17/03
Discharged 12/14/07

Your credit prior to you filing BK and also how you conducted yourself during your 13 Plan (i.e., no late or missing payments) helps a lot with obtaining credit and/or refinancing after discharge. Also, if you had a prior car loan through GMAC, Ford Credit or similar car brand financing, and those payments were all made on time and never late, that is another plus. We were lucky in that we were able to buy out early of our Chapter 13 Plan. At the same time, I desperately needed a new car inasmuch as the car was 8 years old, ready to die and costing a small fortune to keep running. We investigaged GMAC after talking with some folks since we had previous car loans through Ford Credit and GMAC. One was still on our credit reports as being completed successfully and paid on time and in full. We did not say a word about our Chapter 13 at the dealership when we arrived. We test drove cars and got all the financing information available and all the promo information. At the time they were offering 0% financing on 2, 3 and 4 year loans. We left stating we wanted to look at Ford Focuses and Volkswagen Bugs. We also had a trade. The next day they called and upped the amount of the trade which made the deal really enticing. We took the chance. We asked them what to do to apply to obtain the vehicle and we were told to apply online. Prior to doing that, I emailed the finance manager of the dealership and copied our salesman and told them about our BK and what happened for us to have to file BK and that during our Plan we were never late with anything. Prior to this, they had no knkowledge of our BK and since we did not divulge that information, we got their promo rates all written down as to the cost of the car, trade in, etc. so we knew what we were dealing with. The manager emailed me back and said he did not foresee any problem and to pelase apply online as instructed. We did and we were approved the same morning with a 4 year loan at 0% financing. Yes, it does happen.

Now, that is not saying the above will work for you but anythign is worth a shot if you had prior good loans with GMAC and/or another major car loan lender. I would not dilvulge the BK at first to see what happens and that way you get all the good rate information. They even have specials for used vehicles. Do your homework ahead of time find out what you can afford and whether or not you have a trade in to help out. A lot will depend on that or a down payment of any kind.

Capital One would be my next suggestion if the above does not work out for you. But the rate may be a bit higher as I am sure you know.

Best of luck and keep us informed!

[Cramdown]

Don't go the Cap One route (use as the VERY LAST resort) unless you plan on disconnecting your phone. If you miss a payment by 2 days or more, they will blow you phone up!!

Good luck!!