car during 13

[jwillia2000]

has anyone financed a caar during 13 and what was the intrest rate. i know i would have to get my trustees permission but my car would not last 5 years because i drive about 500 miles a week for work

[lrprn]

You are going to be facing an uphill challenge to find a car lender while you're in an active Ch 13, jwillia. If you are able to find a lender who's willing, the interest is going to be sky high - probably in the 18-22% range.

Hopefully one of our 13ers who has had to do this will have some personal experiences to share with you.

If you haven't filed yet, it would be far better to replace your car before filing than to try to do it after.

[jwillia2000]

The problem i have is i'm so upside down on my car. worth 5 owe 11. lawyer said he
could negociate with creditor to get interest (high now) reduced to pay off car earlier.
Then alos we would surrener car after i find something else. really confused

[HeatherB]

car during 13

I had to buy a car during my 13 (before I converted to a 7). My family only had one car at the time and it broke down. My credit was screwed up still so I ended up going to a "buy here, pay here" place. YES - I know that I am paying too much, but it's what I had to do.

When I went to convert my chapter 13 to a chapter 7, the lawyer I talked with (a different one from the same office as my original lawyer) raised his eyebrows when I told him I had bought another car. Then he said, "well, you got it approval from us, right?" I told him I didn't know I had to. Then when I told him it was our only car and that my husband's name was on it, also, he didn't question my anymore.

I'm thinking that if you plan on getting a new car (depending on the price) you may need to approve it through your attorney. Not sure, though.

But, yeah, we are being overcharged for this vehicle.... but there was no other solution for us.

[lrprn]

The problem i have is i'm so upside down on my car. worth 5 owe 11. lawyer said he could negociate with creditor to get interest (high now) reduced to pay off car earlier. Then alos we would surrener car after i find something else. really confused

What your lawyer is suggesting is to renegotiate your loan with the lender to reduce the interest rate, then put the car in the plan to pay it off over the 3-5 years of your plan. Any extra between what you owe and what is paid back through the plan will be wiped out at the end of your plan.

The other option is to surrender the car in the bankruptcy and walk away from the $11K you owe. You can still buy a car before you file even if you intend to do this, and are likely to get better (although still bad) rates than if you try to get the car after you file.

Sometimes lawyers know about lenders who are bk-friendly - ask your lawyer if he/she knows about a few in your area.

[Flamingo]

has anyone financed a caar during 13 and what was the intrest rate. i know i would have to get my trustees permission but my car would not last 5 years because i drive about 500 miles a week for work

Some people have horror stories; some don't. In the past, we had car loans (all paid on time and in full) with Ford Credit and GMAC. Last year, just prior to our discharge, we obtained 0% financing for 4 years on a brand new 2006 GMAC vehicle. We qualified for their promotional rates even while in Chapter 13. This is not made up; it's true. We could NOT believe it. A LOT depends on how you have carried yourself through your Chapter 13 (payments on time, etc.) and if you had previous car loans and a good payment record with Ford, GMAC, etc. Now, this was toward the end of our Chapter 13; it appears from your posting that you may be toward the beginning of your Plan. If that is the case, after you get your Trustee's permission, contact the Finance Manager of a dealership at which you may see a vehicle you are interested in and sit down and explain the situation. Many, if not all, will work with you, especially if you were good with past car loans and are current with your Chapter 13. You may be lucky as we were (I still can't believe it) or you may have to deal with a much higher rate. You can also ask your attorney for a reference for a car dealer who is favorable for those in Chapter 13 as he/she handles issues such as this all the time.

[woeisme]

car

We have two cars, one is 10 years old with 140K miles on it and other is 8 years old with 125K miles on it. So I thought it would be good to get one replaced before filing, but my lawyer told me no, I wasn't allowed to take on any new debt once I had talked to him about bk, and that when I need a new car I need to get trustees permission and then do it through the Chapter 13. So I didn't get a new car before hand and now have filed (but not confirmed) and thinking I made a mistake, really should have got a new car before filing, but too late now. (My lawyer even told me when signing the paperwork that my payback would have been better if I had a car loan in the picture, after telling me not to get one!!!) I guess they have to say "no new debt" when asked due to the law, but sure was bad advice that will probably come back to haunt us when one of the cars breaks down. On the plus side, we do get to keep tax returns (as long as total of all state, fed and local is less than $6500) which are usually around 3K, so will use that and trade-in to get a used car in the spring instead of even trying to do it through the Chapter 13.

[imbroke2]

I keep reading questions about buying a car under 13. We just started ours (CH13-5years) of course. I expect that we'll probably have to buy a new one before the end, but I am not too worried. When we took our creditor class-the 2nd one to take before discharge-we were told to contact our lawyer and trustee, that they have a list of reputable lenders who deal with BKs in case we need to buy a car. Of course we were also told to contact them in any case of obtaining new credit.