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Surrendering car in BK, what should I buy?


Denita
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All of you have been so helpful to me on this site - just wish I would have found it before I needed to file BK....;)

I have a dilemma now with my car. I am definitely surrendering my car in the BK because the current lender would not modify the terms at all. I do not want to reaffirm since the vehicle is upside-down. So now to the dilemma:

I only have $3500 to put down. I don't think I can get financing because I have not been discharged yet. (Discharge scheduled for Jan 2009). The vehicle needs to be a "decent" vehicle because I am in real estate sales. It needs to be 4 doors. I am thinking I can buy something decent for less than $7k out the door.

Please tell me, what vehicle would you suggest and why. I am asking vehicle type (like, for example, Chrysler 300, Land Rover ___, mini cooper LOL). I am leaning toward a small SUV (even though the gas milage is awful, I can have it paid off in 6 to 8 months). Don't suggest anything expensive please :shock: just what you think would not get your alarm bells ringing if you were a buyer getting into my car/suv to take a look at homes.

All comments welcome:)++

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I'm not sure how much a used Nissan Murano would cost. I rode in one a few weeks back that belongs to a co-worker of mine. They seemed to have plenty of room and looked nice and professional like.

Other than that, possibly a camry or accord or something. You'll just have to check around to see what is available in your area.

I know my credit union posts cars for sell that are repos. You can check the paper too. Sometimes people will want someone to take over the payments instead of having to give it back. That might be a way to get something decent.

Good luck and I hope you find something good.

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Two things Denita:

1) Keep in mind you have other options. You can REDEEM the vehicle. In my opinion, this is a very underutilized option (why? it requires work by BK attorneys, lenders hate it, and pro se filers have an additional hoop to jump through).

So, for example: Your car is worth $6500. You owe $13000. You opt to redeem the vehicle and pay the lender a lump sum of $6500. The car is now paid in full with no lien.

No cash to redeem? There are "727" lenders that will make up the difference. Beware that rates are punitive (as they maybe should be), but I don't think there are pre-payment penalties and you can really whack payments down on what is likely to be a small balance since your redemption loan is likely to be much smaller than a loan from a dealership on a different car. So even if apr is 28%, its on 1/4 the size of a loan that it would be otherwise, and you can make triple payments and pay it off in 6 months. Besides, you know what you are "buying" when you redeem.

2) You've probably read this before, but buy a used Honda or some other "beater" that will last you forever. In 2004 I bought my Honda Civic with $3500 cash. 4.5 years later, I still drive it. All in, it has saved me $900/month over my previous vehicle. And since I've driven it for 53 months now, you can see how quickly it adds up. My 401k contributions are up to the federal max, I make extra mortgage payments, I add to my son's 529 every two weeks, I bought and manage a rental property, and I'm almost ready to buy another- all in 4.5 years. why am I sharing this? I only earn slightly more than I did when I filed Chap 7 in 2004. It was all about the car. The cash freed up by owning a reliable & efficient beater was the cornerstone of my post-BK five year plan. So much so that I consider it the best financial move of my entire life up to this point.

With being in real estate sales, maybe you can get a nice five year old Camry or Accord- or redeem your current vehicle at a sizable discount.

I hope this helps. Good luck.

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Thank you both for taking the time to help me decide the best course here!

I did not know that you could redeem if you did not own it 910 days (I only have owned it since June 2006). I will definitely check into that aspect since the car is way upside down.

However, I have been really interested in having no payments on anything and switching to just cash. As you pointed out, vehicle payments are a waste. If I have to make 6 or 8 payments that's ok to get a decent car/suv - but to make payments for years on a car - ugg! XhairX I am done with that!

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