Receiving Car Offers after Filing Bankruptcy?
So my girlfriend is filing for Chapter 7 Bankruptcy. She has decided to include her car in the bankruptcy for it has a 130,000 miles on it and she still have 5 years left to pay off on her auto loan. She will still need to have a car to get to and from work among other things. My question is right after she filed for bankruptcy, which she has not been to court for yet (not till April 22nd). She has started receiving many auto loan offers from dealerships. I would assume after filing chapter 7 she would have a hard time obtaining an auto loan. So do you think they will giver her one at a high interest rate? What are the chances of her getting an interest rate below 10%. A friend of mine told me that filing bankruptcy is not what is used to, creditors see it as a clean slate (free of any debts). Does anyone have any insight on this matter? It will be greatly appreciated :o)
August 31st, 2009 at 7:05 am
Auto finance is what I do for a living and there are marketing companies that sell bankruptcy list to dealers just so these types of mailers can be sent out.
There are several lenders believe it or not that will loan to people with fresh bankruptcy’s due to the fact that they know the people can’t file again for 8-years and that they are desperate.
As far as getting a loan with a rate of 10% or lower forget it unless she has a massive down payment to bring the loan to value down to below 50% she is looking at whatever your State maximum interest rate is.
Basically after bankruptcy you have to buy your credit back weather it’s with credit cards or car loans.
Good luck.
August 31st, 2009 at 7:05 am
It is common for Ch 7 clients to receive offers for cars after filing. Creditors see it as a clean slate because people have to wait at least 8 years before they can file a Ch 7 again. However people can file a Ch 13, but a Ch 13 is a repayment plan in which they would still have to make payments on the car or surrender it. She probably will have a high interest rate, but who doesn’t? As long as she continues to make her payments on time it shouldn’t be that bad. The Ch 7 is wiping away almost all of her debts, unless she owes the government or student loans so I guess your answer is yes creditors see it as a clean slate.