? about TRADING in auto that is special financed!

[800isthegoal]

Hi everyone!

 

Hope you all can help me out with this. To make a long story shorter I went through a very bad divorce. About 18 months ago I got approved for a car loan through Crescent Bank and Trust out of Louisiana. My interest is around 24% and I financed around $12k with $2k down. When I obtained the car loan my fico scores were in the upper 400's and thats where they still are currently as I am just starting to work on it. MY question is this: I know I am way upside in my car more than likely for only having it a short time but do you think I could trade it in and get more of a car and a lower interest rate? Like i said I have NEVER been late on any of the 19-19 payments so far! If I can get a better rate how much better do you think I can get based on my payment history? Thanks and please add any advice below as well. I also have a few thousand dollars I could use for my negative equity if it is absolutely REQUIRED!

 

 

[IndyPoolPlayer]

If there's nothing wrong with the car, I'd save your money and not throw good money after bad. If your FICOs haven't improved then your rate likely won't be any better. Work on the baddies first then reward yourself later.

[800isthegoal]

If there's nothing wrong with the car, I'd save your money and not throw good money after bad. If your FICOs haven't improved then your rate likely won't be any better. Work on the baddies first then reward yourself later.

its actually the car and the fact i will be filing chapter 7 soon and cant buy anything for awhile. car is approaching high mileage and is starting to need work. any suggestions based on this?"

[Clydesmom]

 

If there's nothing wrong with the car, I'd save your money and not throw good money after bad. If your FICOs haven't improved then your rate likely won't be any better. Work on the baddies first then reward yourself later.

its actually the car and the fact i will be filing chapter 7 soon and cant buy anything for awhile. car is approaching high mileage and is starting to need work. any suggestions based on this?"

 

 

This adds to the problem. If you have a car that is working (and needing repairs won't matter to the BK court) then financing another one knowing you will file BK is prohibited.

 

The only thing worse than paying high interest is refinancing the difference between your car's value and what you owe into the next loan. then you are paying on two cars one of which you no longer own.

 

Unfortunately I do not see a way out of this easily. You are unlikely to get a lower interest rate with a credit score that low even with over a year of on time payments. The good payment history is but one factor that creditors look at when determining if they will lend money and at what rate.

[mk_378]

My suggestion is to drive slow and (if you intend to keep the car) pay fast. Trading to another car just increases your negative equity. If you could get approved at all, with scores in the 400s it will be state maximum APR again. Taking out another loan while planning to file BK is not advisable.

 

You will need to look at the amount owed vs. the value of the car to decide whether to keep it or surrender in BK. You will be able to buy another car right after discharge with about 10% cash down.

Edited January 15, 2014 by mk_378

[800isthegoal]

if I financed another vehicle how long must you have it before being able to file for BK? or is it illegal to purchase any vehicle at all knowing that you will be filing BK in the upcoming year? say I had no choice but to trade it in and get another vehicle how would you suggest doing it other than paying off all the negative equity first and then not filing BK until it is paid off or until a time I am allowed to file? how should I go about trading it in?

[BRBiz]

if I financed another vehicle how long must you have it before being able to file for BK? or is it illegal to purchase any vehicle at all knowing that you will be filing BK in the upcoming year? say I had no choice but to trade it in and get another vehicle how would you suggest doing it other than paying off all the negative equity first and then not filing BK until it is paid off or until a time I am allowed to file? how should I go about trading it in?

With the BK stuff aside you will not be able to finance another vehicle and do better.. Because you will have to come up with the money to cover the negative equity since with your scores you won't be able to rollover that much if any negative equity and even if you did you will be probably be paying the same interest rate on a more expensive car with negative equity in it. Your better off waiting for your BK and if you don't want the car give up in BK and right after discharge get a new car. You will most likely getter a better rate then then you will know.

[MarvBear]

? about TRADING in auto that is special financed!

 

You would trade the vehicle like you would trade any other vehicle encumbered by a lien. The leinholder of the trade vehicle has nothing to do with your current credit qualifications or lack thereof.

 

You still have to qualify for a loan, and meet the approving lender guidelines.

[keepmine]

if I financed another vehicle how long must you have it before being able to file for BK? or is it illegal to purchase any vehicle at all knowing that you will be filing BK in the upcoming year? say I had no choice but to trade it in and get another vehicle how would you suggest doing it other than paying off all the negative equity first and then not filing BK until it is paid off or until a time I am allowed to file? how should I go about trading it in?

The poster who told you that financing a car prior to bk was prohibited is wrong. Nothing in the bk code preludes you from taking on a auto loan prior to filing. It's pretty standard advice on the bk forum here and other sites to get your transportation needs taken care of prior to filing.

That said, I agre with the other posters who say with your scores and negative equity, your chances of getting financing are remote.

What I'd suggest is, speak with your attorney about a 722 redemption on your present ride.

 

http://www.722redemption.com/

[MarvBear]

 

if I financed another vehicle how long must you have it before being able to file for BK? or is it illegal to purchase any vehicle at all knowing that you will be filing BK in the upcoming year? say I had no choice but to trade it in and get another vehicle how would you suggest doing it other than paying off all the negative equity first and then not filing BK until it is paid off or until a time I am allowed to file? how should I go about trading it in?

The poster who told you that financing a car prior to bk was prohibited is wrong. Nothing in the bk code preludes you from taking on a auto loan prior to filing. It's pretty standard advice on the bk forum here and other sites to get your transportation needs taken care of prior to filing.

That said, I agre with the other posters who say with your scores and negative equity, your chances of getting financing are remote.

What I'd suggest is, speak with your attorney about a 722 redemption on your present ride.

 

http://www.722redemption.com/

 

 

 

Except for the fact that usually the credit applications we use specifically ask questions regarding BK. And the consumer confirms that they are not actively in a BK nor are they at any time contemplating filing for BK.

 

If I knew the consumer would be filing for BK shortly after taking the loan, I would decline to assist. My reputation is far too important.

[tomforr]

If you're paying 24% interest why not surrender the car under the BK and buy a new one coming out of BK, I can't see the interest rate being higher than 24%. There is substantial anecdotal evidence in the BK forum that some are getting Cap1 loans at 12% and under