Financing car during BR

[Just Lue]

If I buy a different car after my 341 hearing, surrender my old car, am I suppose to inform the trustee of the change? The new payment would be only $50 less than I am presently paying, and with payments 1 year sooner. I am way upside down in my present car, and my intention was to keepy making the payments, not reaffirm, and when I could get credit I would surrender it. I am in a state where you can surrender the property at anytime, but may keep the asset without a reaffirmation as long as the payments are current.

Thanks. The new financing company is telling me that I do not need to report the change in cars as I am current on my old one, the payments are similar, but no equity. I would not put anything down, and buying the car at fair price but no equity.

Your thoughts on this?

[originalhealer]

How did you manage to get a car financed in the middle of a bankruptcy with no down payment???? Please share!!!

[Just Lue]

Please help.

Actually I purchased it 3 weeks after filing and before my 341. (hope I don't get in trouble) My attorney didn't think it was a problem as long as my payment was equal or less than currently, and I did not put a lot of money down.

I went to a local dealership in which I received a flier that said that they would finance before 341 hearing. I thought just give it a thought. I purchased a fairly new car with low miles. The interest rate is crazy. Its 21%. But better than the 722 redemption of 24%. And for each year of timely payments your interest rate is reduced by 2% to a limit of 14%. Your payments do not lower but the difference is applied to your principal so it gets paid off sooner. Since it is not new, and close to wholesale cost, I hope to refinance it in a year or so from a credit union. If you have a score around 600 you can get around 8-9%.

So I thought what the heck! I was trying to do the 722 Redemption on my car and with $14,000 being upsidedown I thought it would be cheaper than what I was paying. My score is 540 after filing BR. It was 730 90 days ago, before I quit paying on my cards before filing. So I hope with a year of payments on time I will get the credit score back up in the 600 range, I should not be upside down or close to the value and refinance. But it sure beats the gas hog, and owing so much on a car that was not worth that.

Just worried that the trustee will ask me if I made any new purchases since filing. If so, the finance company indicated that they might not allow final approval to go through. I would think since this is a purchase after the filing that it does not cause a need amendment in the papers, and the payment is only $50 cheaper (although much better situation than currently in). Also, terms are a year sooner than my previous loan.

So just wondering if I got myself in a heap of trouble now. I did it with the best intentions, and my lawyer does not think it is a problem as I did not change my overall monthly expenses to get myself out of qualifying for a Chapter 7, and bettered myself. Just hope that this does not become an issue with the trustee or if even needs to be addressed.

I was shocked after signing the papers when the representative said that the finance company will pull out if I amend my BR to include the new debt even with a reaffirmation and since it was entered into after BR it is not necessary, and if has not changed my monthly situation should not be an issue, and not like went out and bought a more expensive car, more practical, a bit newer, and no major upsidedown, but no equity either.

Please, help! Good advice would make me feel better, or am I worrying myself into nothing? Or should I be worried?

I will be surrendering the other car after the 341, and I am current on payments on it up to 9-15.

Not meaning to cause problems, just trying to get myself back together in a good financial sense.

Thanks, any words of advice are appreciated and much needed.

[originalhealer]

I don't know, you just amazed the heck out of me that you were even able to do this at all. Since you have a lawyer, if he said it was okay then I guess it is.

[hhou812hh]

That does sound surprising. It's easy to get credit even right after a bk discharge, but before the discharge is unheard of. I couldn't even get a secured visa until after the discharge.

Make normal payments on the car for about a year or 2 and go to a local credit union to see if you can refinance it. I bought a car (used) at 21% 4 year loan and 2 years later my credit union refi'd it for 12%. My payments were cut in half.

[Lightning]

Since you bought the car before the 341, you would have told the trustee about it when asked if you incurred any new debt recently.

[Just Lue]

I have not had my 341 meeting yet. My lawyer said that if I am asked if I have incurred any new debt, that I am to mention that I have been pre-approved for a loan, but am current on my present auto, and have not officially surrendered it. And that I am weighing my options, but regardless to tell the trustee that I do not expect my expenses to change significantly as my monthly amount will be about the same, just a shorter term, no money down. If not asked, it is after the filing, and does not change my expenses significantly to push me out of Chapter 7. Hope that is good advice. Here is another clincher......my job is fairly stable, but many people in my department have been laid off. So I have been quietly inquiring about other opportunities. Now I have a good shot at a better job at about $10,000 more a year, and they want me to start in 3-4 weeks. I added in my added commute expenses and daycare, and I am about the same in income, but just getter growth opportunity and more security. (single mom need that). So.....you can see that some nice things have been happening to me lately, but it may mess up by BR. I hope not.

My intention is not to lie to the trustee in anyway. But if not asked particular questions that pertain to the car or job, I will not volunteer as it does not change my figures in anyway. And you never know if the new job will come through anyways.

I just am sick, instead of feeling happy. I have over $65,000 in credit cards, and there is no way I can afford to pay them. I am running close to $700 in the hole with an average expense. Just trying to start over, and make a living for myself and my son.

Any words of wisdom or encouragement or concerns are much needed. Love this forum!

[freshstarter]

I am running close to $700 in the hole with an average expense. Just trying to start over, and make a living for myself and my son.

Any words of wisdom or encouragement or concerns are much needed. Love this forum!

Well that extra $10,000 a year should help close that $700 gap!