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QUICK please - discharge date 5/27/14

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    QUICK please - discharge date 5/27/14

    I have a car loan that has not been reaffirmed. I planned to keep the car and just keep making payments so that I'd have the acct in place right out of bk - to rebuild credit and to keep from my interest rate from going any higher (currently at 13% - not great, I know, but not as high as it could be, right?) Anyway, my anticipated discharge date is 5/27/14 - next Tuesday (!), and I was just told by someone that I should have traded the car in instead, because without it being reaffirmed, it won't help rebuild my credit anyway. Leaving the question of whether or not the potentially higher interest rate is worth the credit reporting, dependent on how much higher we're talking about the interest rate being...

    As far as the car, it's a 2 door and I've wanted to trade it in for a 4 door for quite a while, but it is still under warranty, and has been a great car so far (bought it new in 2010). I'm not upside down on it (I owe right around what it's worth probably, I may even be $1,000 ahead on the car actually), so I thought the best thing to do was to keep it - for the credit relationship and to keep my interest lower than it may be under a new loan (post bk). And heck, I'm just now paying down the principal, right?! Lol.

    I thought I read before on another post that someone was being refused a car loan because their old loan hadn't been reaffirmed, and so the original lender could come and take the car still (so the new, potential lender wouldn't take the trade)? I may have misunderstood or my memory may not be clear on the details, but it has me freaking out (it was somewhere along the lines).

    Should I be out car shopping this weekend?! Please help! If I should be looking for a trade in, should I have gotten one (or be trying to get one) before my discharge date (literally this weekend!)?

    (And side note, I have posted before and replied to comments you all have given me, but when I replied, I couldn't see my reply with the others that were posted, before or after my response. Is that normal? I guess I don't quite get this forum thing!)

    #2
    The last thing that you should be worried about, after having recently filed for bankruptcy and about to receive a discharge, is your credit rating! The bankruptcy itself has done enough destruction that will affect your credit for some time. For others reading, you should never reaffirm for a trade line and should always take the opportunity to ride-through (keep the property and pay, without reaffirmation) every single time.

    Please don't read into anything about the other person having an issue. That is very atypical. In fact, I refinanced both a non-reaffirmed auto and a redeemed auto just months after discharge.

    Your personal goal at this time should be to take advantage of this fresh start and not laden yourself with new debt. Take this opportunity to revisit your budget, start saving, and rebuilding your credit through other means.
    Last edited by justbroke; 05-23-2014, 11:09 AM.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      I agree with justbroke. Don't take a new loan just to have it report on your credit report. That is not a good financial decision.

      The lender will not take your car if you keep the payments current. As far as the other post is concerned, the lender who refused the loan could have taken the trade-in, paid off the discharged loan and the prior lender would have no right to take the car. Either the lender didn't know what they were talking about or the car wasn't worth the balance on the discharged loan. Or, maybe it was the lender's policy not to give a loan to somebody who had a prior car loan discharged in BK.
      LadyInTheRed is in the black!
      Filed Chap 13 April 2010. Discharged May 2015.
      $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

      Comment


        #4
        Thank you, thank you! So then I am still doing good... whew! Good to know! I am/was planning on keeping the car; I did not want to get a new loan originally (even though I have wanted to trade the car in for actual, practical purposes, for a couple of years now). I'll stick with what I read on the forum originally - not to reaffirm (not that I have a choice, necessarily), but to keep paying on it and ride it out. Is it true, though - that the payments on an auto loan that has not been reaffirmed won't be reported/won't help rebuild credit? The person who said that to me has filed Ch 7 bk twice, but I don't know that they know anything, per se...

        Comment


          #5
          Originally posted by kjg View Post
          Is it true, though - that the payments on an auto loan that has not been reaffirmed won't be reported/won't help rebuild credit? The person who said that to me has filed Ch 7 bk twice, but I don't know that they know anything, per se...
          They know that. There could be exceptions. But, usually a discharged loan does not get reported on your credit report.
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment

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