To reaffirm the Sequoia or not?

[GA2ndChance]

Hi, I am currently in a Ch7 BK. Been through the 341 on May 18 and need to make a decision on a vehicle. I have '03 Sequoia thats worth about 11k and I owe 15k. My first thought is to let it go but I am not sure about getting an auto loan while in BK. I expect discharge in late July/early Aug. I like my Sequoia but its got 110k miles on and will probably need about $1000 in the next year to replace worn parts.

Can you get a loan before being discharged? Do you have any idea what sort of rate or payment I would have on a 20k loan? I have good, verifiable income but nothing to put down.

Any insights or stories would be much appreciated...

[lrprn]

I have '03 Sequoia thats worth about 11k and I owe 15k. My first thought is to let it go but I am not sure about getting an auto loan while in BK.

It's going to be extremely difficult, if not impossible, to get a loan during an active Ch 7. After your discharge and closing, you can get a loan, although the terms are probably going to be awful....like an APR in the upper teens awful

It sounds like your '03 Sequoia doing well enough to make it through another year with a $1K investment. It would be best to nurse it though and get another car after that when your odds of getting better loan terms are much better because your credit scores will have improved with 6 mos to a year of on-time payments. You can also save during that time and come with a good down-payment, which will help you get better terms as well.

Of course, after discharge Ch 7 filers typically get offers in the mail from auto dealers and lenders because they know you can't file again for eight years. Given the terrible current state of the auto industry, you may be able to pick up a deal right after closing - it's hard to say.

Also please consider buying a good used car still on warranty rather than brand new. A new car depreciates badly the second you drive it off the lot, and if the terms of the loans you are able to get aren't the best, a used car will tie you to less of a loan than a new car.

[GA2ndChance]

Can you negotiate a reaffirmation?

Thanks for input. I have heard that you can negotiate a reaffirmation if you are upside down. For instance, my vehicle is worth about 11k and I owe 15k. I could tell the bank I will reaffirm for 12k. They would be better off that trying to sell it themselves. Has anyone done this type of thing?

[sassiebaz]

Thanks for input. I have heard that you can negotiate a reaffirmation if you are upside down. For instance, my vehicle is worth about 11k and I owe 15k. I could tell the bank I will reaffirm for 12k. They would be better off that trying to sell it themselves. Has anyone done this type of thing?

Not unless the vehicle was purchase before a certain date. How old is your vehicle? A cram-dwon may be an option, but not negotiating with the finance company. I couldn't even get my apr lowered by a few percentages...I had to let my vehicle go. But, your case may be different.

[chad9162]

You could try a ride through and when the time comes let it go later! Depending on our current loan you might actually save money by keeping it. Buying something new at $20K with a high interest rate will be expensive....@20% APR your payments are $530 total interest payments $11,793 @15% your payments are $476 and total interest $8,548.

We are reaffirming our Sequoia, we owe about what it's worth and only have about 30 months left. Our credit union did not try and add our other debt to the reaffirmation agreement

[lrprn]

I have heard that you can negotiate a reaffirmation if you are upside down.

If your vehicle was purchased less than 910 days ago, you can try to tie a cram-down to actual value and/or a reduction in APR% to agreeing to sign a reaffirmation agreement. Here in the forums and elsewhere around on the net, there have been a few cases where the lender agreed to the proposed change in loan terms in exchange for a reaffirmation agreement, but many more where the lender did not agree.

If you are filing (or have filed) with a lawyer, ask what his/her experience has been getting lenders to agree to changing loan terms to get a reaffirmation.

Remember - lenders are not compelled to change loan terms to get a reaffirmation agreement and filers are not compelled to sign a reaffirmation agreement. Both activities are completely voluntary.

[Frshstart09]

I'm in Washington state and just got a loan in active bankruptcy. Loan rate is 19.5% and they did have a 0% down option (but I didn't want it). I got it through a FORD dealership. Evidently there is a niche department offering this type of financing. The good news is that with on time payments, the percentage rate decreases half a percent every three months. I had a great credit history until recently, so I had a long history of on time vehicle payments. I don't know if they have similar offers in your state. Good luck.

[Frshstart09]

Oh, and I know the interest sucks. THe sad thing is that this payment is still 85/mo cheaper than the car I'm giving up. It's a real eye opener to know that I was in such bad shape that my payments are better now with a crappy rate. Jeesh. LOL

[GA2ndChance]

So no luck negotiating and the finance company wants the back payments tacked on to the current payments over the next 6 months. This means a $770 payment for the rest of the year. Which pretty much means we have to let the Sequoia go. Does anyone have any suggestions for getting a car loan in the midst of a ch7 in GA? I have talked to several lenders and no one with talk to me until I get my discharge.

[chad9162]

Id' wait until discharge. American auto companies are desperate for sales, especially FORD since they didn't get any bail out money. If you had good credit before BK and good income you should qualify.

[aces67]

Oh, and I know the interest sucks. THe sad thing is that this payment is still 85/mo cheaper than the car I'm giving up. It's a real eye opener to know that I was in such bad shape that my payments are better now with a crappy rate. Jeesh. LOL

Yes that is an eye opener! I just realized this myself on my current vehicle.

[debtmonster]

It's going to be extremely difficult, if not impossible, to get a loan during an active Ch 7.

I don't understand the concept of why it should be difficult or impossible. These people should LOVE that you just went bankrupt and know that you can't do it again. There should be banks lined out the door waiting to give people car loans. What is the story?

[fyi2]

I am about 15000 upside down on my auto (another post grrr)
but I only have 32000 miles and besides a break in the bumper and some scratches ..i like it BUT i am not keeping it at 15000 over worth

I noticed on my petition my attorney put reafirm on the auto..
I am not reafirming!?

I did read somewhere that your attorney can request with the lender a decrease to market value and then if they deny you can apply through the courts to redeem the vehicle at market value with a BK lender... I have assumed this is the 722

341 is in 2 weeks, i cant imagine the tt would approve a reafirmation on a auto with 15000 over and large payment...
soo
should I bring this to my attorneys attention now or wait until 341 then discuss the option of redemption

ALSO
I wonder if the TT will say no to car now you have more money a month so go to a 13? I have to have a car

honestly even with a 722 it looks like the interest will be so high my payments may not change much anyway and I prob will end up paying close to what I am over on the vehicle anyway ..grr


if i go to a lot i will have to get an older car with a lot more miles and still have a payment close to what i pay now.. so i think it is in my best interest to keep this one

I just want it to be ALOT closer to market Value

[OhioFiler]

If you're $15.000 upside down on a car loan and not eligible for a 722 redemption loan you most likely are making a mistake keeping the car and certainly making a mistake reaffirming the loan.

I suggest talking with a few car dealer finance managers and find out what you will qualify for post-BK.

[fyi2]

I have not applied for a 722 yet.. I just know it is an option

I do not plan on reafirming .. not being so upside down
but on my petition i noted that the reaffirm box was checked..

Should i call attorney today and say btw i am not reafirming
(ammendment to petition?)
or
wait until 341 and discuss it .. move forward from there
(then apply for 722)