One Year after Filing Bankruptcy-Buying a Car

It has been exactly one year after I filed Bankruptcy. It was a Chapter 7 no asset bankruptcy. I kept my house and two cars. Life is so much easier now and to think we were struggling with coming up with the bankruptcy attorney fees. It almost seems laughable now that we are start to focus on living rather than surviving. Yes, money is still tight but no where near as tight as it used to be. I think keeping some our debt helped us.

When keeping a house or vehicles you have to reafirrm the debt in order to keep your possessions. This assumes you are not too far negative and the court approves that you are able to keep it. I think I was negative by 100.00. What do I mean by negative? This means after your current bills are paid can you really afford to keep the items you want to reaffirm. I explained in my court documents that I was current on my mortgage and vehicles and had never missed a payment. I then explained how I would pay for it. The judged read my chicken scratch on the bankruptcy documents and signed off allowing me to keep the debt. You will get to keep the objects assuming you you still owe money on object in question. If you have significant equity you will have to exempt it.

During this time I have continued to pay on one house, two vehicles and a student loan. I have never been late on my mortgage because it is automatically taken out of my account regardless if the money is not there as was in the past. One of the nice things about automatic withdrawal of my house payment is that it is set up to be automatically deducted the day before it is considered late. So, instead of a house payment being due on the 1st as most bills are it is due in the middle of the month. During the first year after bankruptcy I paid off two vehicles and then both broke down. I was without a vehicle and we needed a vehicle.
I visited a couple of bankruptcy forums and read to see what everyone was doing after bankruptcy. It seemed most people were getting approved after bankruptcy without problems by companies such as capitol one and roadloans. I applied and was approved by both of these companies at a outrageous interest rate. We are talking 15-16% for an auto loan. It is just shameful how they can charge this type of interest rate. I guess it boils down to that I am still paying for my bankruptcy one way or the other. I ended up finding another finance company where I paid a similar interest rate that was ridiculous . The percentage ended up being 15%. This really depressed me. I had just paid off two vehicles and really expected a better rate.

Some of the details of the deal was I didn't put any money down. I had just had to pay large amounts to get my vehicles fixed before I decided to give up and buy and new\used vehicle. I purchased a 2006 vehicle that cost $341.00 a month. One of the nice things dealers will tell you is that you can refinance after a year to lower your rate and get a better payment. This is a bull crap story and don't believe it. MOST banks wont refinance a car. However, people that belong to credit unions often have better luck at refinancing a vehicle, therefore, if you want to take this approach you should establish a relationship with a credit union after you purchase your vehicle if you don't have an account with one.

Is filing Bankruptcy a good Decision?
I can honestly say filing bankruptcy was a good decision for me and my family. The only thing that tears me up about this is I have to wait 2 years until I am out of bankrutpcy to refinance or to buy a new home for FHA or conventional. Home prices have dropped so much it is mind blowing. There is a foreclosed house near me where they paid 105K and the house is now for sale for 25K and it is nicer than my home.

One of my hopes is that I picked the right time to file while the country is in a financial mess and I will look more appealing to other people later. However, my goal is not to rely too much on credit and to try to use cash. Credit is only worth having for financing houses or vehicles and then good credit is only worth having to get the best interest rate. I really think if you hesitant about filing bankruptcy then you need to look at your credit card statements and see how long it will take you to pay off your debt. Since the credit card reform all credit card companies are required to place how long it will take you to pay off your cards making mininum payments. If you can pay off all you debt and save for retirment in 7-10 years then you really should consider contacting a michigan bankruptcy attorney to discuss filing for bankruptcy. It may be the best thing you ever do.

Credit Cards for Business Travel after Bankruptcy

Credit Card for Business Travel

After Bankruptcy I needed a Credit card for Business travel. Yes, I have a debit card that I could use. However, right after my bankruptcy discharge I had to travel for work for a week I used my debit card. This “was” fine because the hotel costs were already covered by my work. However, when I arrived to the hotel they put $250.00 hold on my account until after I checked out. They of course would deduct any hotel charges I had and release the hold on 250.

They wanted to make sure I had enough to cover any costs for my hotel room. You know, just incase I wanted to order some burgers, wine, porn movies etc. I still don’t make that much money that I am free and clear to just have them put a hold on my account for “possible’ charges that ‘may occur. I filed in Nov had my 341 in January and had just had my discharge when I had to travel.

After my credit less experience I wanted to get another credit card for business travel. I would just use it to pay for all my travel expenses and be reimbursed to pay off my credit card. I just filed bankruptcy and really have no desire to own a credit card. However, reality is if you are in business and periodically travel you should have a credit card. I could ask my company for an Amex card but I am too paranoid I would be declined. I wonder what questions would arise if I was denied the amex card. It’s not like I told everyone I was claiming bankruptcy.

My first thought was I need to check my credit report or more specifically check my FICO score before applying for a credit card. If it was really low I would not apply and just wait. I was wondering what my score would be. I ended up reaffirming two vehicles, house and was still paying on school loans. I actually should have some positive credit history right out of Bankruptcy. Still, I really wondered what kind of havoc my credit scored suffered after bankruptcy. The sick thing is FICO score does not define who you are but if you want to save money and qualify for loans you better have a decent score.

I finally pulled my FICO score for one of the reporting agencies and my FICO was 633. I was actually surprised it was this high. I really had figured it would be low 500’s. So, this eased my thought on applying for a credit card. I would now start my search online for credit cards after bankruptcy and see if I could read any success stories of people qualifying for credit cards after BK. I found several people talking about Orchard bank and Capitol 1. People seemed to be have success on obtaining credit card through Capitol one after they had claimed bankruptcy. I even read someone BK’d Capitol One and applied for a credit card 6 months later and was approved. I figured I would apply for the Capitol One Credit and see if I qualified.

I did have some apprehensions about applying to Capitol One because my wife had them and they seem to charge several fees and try to work the charges so you have very little credit available when you start using them. I figured I would receive a low credit limit with an annual fee. I really despise annual fees. So I was prepared to have a card with an annual fee, low credit limit and a high annual percentage rate. I went online and did a quick credit application and what do you know I was instantly approved with a $500.00 credit line and 0% interest for 6months. I did have to pay a 29.00 annual fee. That seemed too simple right out of bankruptcy to get a credit card. This actually bothered me qualifying for a credit card 3 months after the discharge of my bankruptcy or nine months after filing. I suppose it was most likely my on time payments for 8 months after reaffirming my vehicles and home.

I received my card in about 7 days and went to activate the card. So, upon verification of all the information I submitted my card was activated at 24%. Yikes, 24% for a credit card. It’s robbery I guess I have to keep on paying for filing for awhile. I was happy to find out that when I activated my card Capitol One has what they call a “Credit Steps” program where if you do the following you can get a credit increase. You need to:

1) Use your card in the first 30-60 days.

2) Make 3 consecutive on time payments

3) Not go over your credit limit

I did read about the program on other sites and I guess I can expect an increase to 1,000.00 then to $1,500.00 I figured if I can increase my limit I will try to qualify for another credit card later at some other point. I would like to get one with a decent credit limit (4K-5K) and then cancel my other credit card. My next question is can I qualify for a car loan right now; my cars will be paid off early next year. I am sure if I can qualify for a credit card after my bankruptcy in Michigan even if it was only for business travel.