Hello, I have just found this board yesterday and I have read for 10 hours since. I had a Bk7 that was discharged 2 weeks ago ( filed in 4/2002).The first thing I did was to order my CR from the 3 CRA's, the report had 20 derogs, only 9 were showing as included in the BK, I included them all in the BK. I did the online dispute and disputed all 11 that weren't showing as included in the BK, to try to have them reported as included.( all of this post is before I found this board). So I disputed 11 items , to all 3 CRA's at the same time. Question: After some reading , it seems like it was a mistake, how much is this going to affect me and what are my chances to fight to have these items removed after I told the CRA's that I wanted them to report as included in the BK? Next thing I did was to apply for a secured card,(American Pacific Bank),the annual fee was only $39, but they requested my BK discharge paper along with my most recent paystub. Question:Is it going to affect me to have sent my discharge papers to American Pacific Bank and can they share that with the CRA's? The other thing that was odd to me, is that they reported my Mitsubishi car loan as included in the BK, I have listed that item as the items I wanted to keep and all the payments are current and never late.When i saw that I called mitsubishi finance ( my creditor for the car) and asked them why they were reporting as Included in the BK, I was told that on top of listing the car as an Item that I wanted to keep, i should have file a separate debt reaffirmation agreement with them, They told me that as my BK was already discharged, I could keep making payments but It was going to show on My CR as Included in the BK for the next 10 years. Now I owe 22K on that car and it is only worth 15K, so I am upside down 7K. Question: Should I just return the car as it is already affecting my score and I am upside down on it? ( I don't really want to keep it as they don't want to work with me to not report that as included in the BK and I am making a $530 a month payment that is not helping my credit rebuilding.) As you can see I need a lot of help, so Any help or advice is greatly appreciated. P.S. I know now not to send the CRA's any BK papers. I didn't have any other alternative to the BK, I owed almost 190K in CC debts and they were harrasing me at work. Thanks so much in advance.
If you return the car, what will you drive? If you decide to purchase a nice used car for cash, then you are fine, but if you try financing you could be in trouble. Also, what is current rate on the car and how old is it. You will need reliable transporation for the next couple of years, unless you are willing to pay the finance companies outrageous rates of 20% +. Just something to think about. Dani
The interest arte on the car is 5.9% ,I was thinking of getting a new car ( my finances are much better since I filed) . I have a cosigner 7K to put down for a 22K honda, my EX score is 572 and the cosigner has 715 average , never late , 10 years of history. What interest rates can I expect on the new car? Thanks again
I am a little confused. Currently, your rate is 5.9% and your payment is roughly $500+ per month. You have a remaining balance of $22K (I guessing about 3-3.5 years left on the loan). You want to purchase a new car which is $22K + interest (let's take the best case scenario and say you get approved for a 7% loan - possible, but not likely). That is roughly another $26K for a five year loan. Your monthly payment (at 7%) will be about $420. You are going to have Mitsubishi voluntary foreclose on the first car to purchase a newer 2nd car. Even if Mitsubishi writes off the $15K you will still be responsible for the other $7K. Your current loan of $22K (on time payments) is now up to $33K. Why do it? Dani
They are reporting it as already Included in the BK, It is not helping me to make the payments, they are not reporting it as a positive account. I didn't think It could be any worse then Included in the BK on your CR. The reason I wanted to return the car is because I was 7K upside down on a car that I don't really like any more and If I get a new loan , even at 10% they will at least report it as good account. Maybe there is something that I dont get. Please explain further. Thank you
Can you not contact your BK attorney to reaffirm the loan? The judge will have to grant approval. Why did your attorney not to do this in the beginning? Even if you give the car back to Mitsubishi you will have to pay them the upside down balance. Typically, a debt is wiped out if you choose Ch. 7 BK, but since you have continually made payments I don't think you are granted this option (for the car). Board members correct me if I am wrong. Dani
Please could someone give me a second opinion on this car problem. I need to make a decision but I don't want to screw up. i would like to fix my credit, but should I keep this mitsubishi under these circumpstances? Thank you
DO NOT give up the car. First off, they cannot report this as "included in BK" for 10 years. ONLY the BK itself is reported for 10. The derogs associated with the BK die at 7. Assuming that you have only 3 years left on this loan, you will have the date of your BK as the assigned "first date of delinquency" (when they first started reporting it as a derrogatory. The item would then would be scheduled to fall off your bureau 4 year later. Imagine that you complete the payments. The loan is now paid off. You wait about 6 months and then over a holiday (like Christmas) you dispute that item as "never late" which is true because you were never late. More than likely, it would be deleted right away. If you allow them to repo the car, you will have a repo on top of a BK. That repo will stay there just like the "incl in BK" notation. The difference is, as you continue to pay on time, your score will improve. You will be able to show a new creditor your willingness to repay. Recovery from a 7 will take time. You cannot rush it especially considering how recent your BK is. You can start rebuilding, but you are doing the right thing in being smart about it and asking questions.
Thank you, But if I decide to return the car, will i be responsible for the 7K upside down? (Please read previous posts for full explanation) Thank you again.
This is exactly why you should never reaffirm anything that you are upside down on. If you included it in the bk and DID NOT REAFFIRM you can drive it back to the dealer and walk away. You have no obligation to pay the negative equity. It's match set and point. The creditor eats it all.
Thank you very much, this is exactly what i wanted to hear. The bottom line is that I am making a $530 payment and it is not helping me improve my credit as they report it as included in the BK. So I really think I can't make it any worse then that, return the car , get rid of the 7K nrg. equity and get another car payment (with the help of a cosigner) , so when I make my payments it will at least be reported as a positive item on my credit report. Please correct me if I am wrong. Thank you
From a dollars and cents point of view, I just don't see how you gain anything. You'll for darn sure be upside down the minute you drive drive the car off the lot at a rate higher than 5.9% plus, you have the responsibility of protecting a cosigners credit. How much longer before the current car is paid off? You're best bet is not to be upside down. Buy something a couple of years old with much lower payments. Let someone else take the 30 or 40% deprication from that you'll see over the first couple of years in a new car.
I have 3 1/2 years to go on this car. You are right, I should get something that is 1-2 years old. As far as protecting the co signer, no worries there. I was in an excpetional situation that pushed me to file for BK. My income is solid and my finances are back in track since I filed. Just thinking about the future and looking to rebuild, the last thing I want to do is make my credit rating worse by returning this car. Thanks for your time.
The damage from bk7 is pretty signifigant, I don't think that a new car loan is going to make it look much better for a long time. As was said earlier in the post, the included in bk thing will fall off after 7 years, leaving a good (old) trade line. Since a new car will depreciate the minute you drive it off the lot, you will be back to square one as far as negative equity is concerned. If you can tolerate the car for a few more years, I think that keeping it would be your best bet. I think that the best thing you can do now for your credit is to remember that borrowing more than you can afford to pay back got you in trouble the first time. This is your chance to start all over. Good luck which ever way you choose to go. cor
[ where is clc when we need her? I have been gone for three weeks and haven't kept up with the posts, I am reading now and am only to the 26th of august,,, ]
When we filed our chap 7 in 91 we were required to either file reaffirmation documents or include the debts in our bankruptcy. If we missed a debt we had the option to amend the chap 7. I do not know the timeframe to amend the papers but I would see if you can get the reaffirmation agreement done now. I remember when we went to reaffirm our car the judge would not allow the reaffirmation agreement. His reasoning was he was protecting us because if he approved the reaffirmation agreement and for some reason we could not make our payments the bank could 1) seize the car and 2) hold us liable for the balance on it...without reaffirmation the bank had only the power to seize the vehicle and we could not be held liable for the balance. We then made arrangements with the bank to pay the original amt due, kept making our payments faithfully and kept our car. Our credit report did not show the auto loan "included in bankruptcy" and it was continued to show "paid as agreed" until it was paid off and in 2 yrs will fall off our report. What I'm wondering is did you report the car loan as a debt in the papers? If so, then it will say included. If you left it off then I would think you could get the "included in bankruptcy" mark taken off your credit report.
Yes, I reported the car loan as a debt. I have a very bad attorney , he didn't advise me to file the reaffirm agreements for my house and car. I went to see him this morning and he told me that it's too late to do it now.(BK disgarged 8-2002). I am just hoping at this point that Countrywide is not going to report my mortgage as "included in the BK". I have the mortgage with them for 52 months now, and it's never been late. Just about the last positive thing on my CR right now. keeping my fingers crossed.
