RV Loans After Bankruptcy – Should You Try It?

How easy is it to acquire RV loans after bankruptcy? Should you try it and what are the chances you’ll be approved? With a bankruptcy 2 years past in my rear view mirror I would like to share my recent experiences in trying to acquire an RV loan as well as the conclusion I eventually came to.

Deciding to Declare Chapter 7

bankruptcy aclassrvsale

Having to declare bankruptcy was one of the hardest things I’ve ever had to do in my life. Due to losing my job and having lived “beyond my means” I had racked up around $80,000 in debt including school loans.

There is such a stigma attached to bankruptcy and knowing it would be on my credit report for seven years, I really deliberated long and hard before deciding to go that route.

As well as the hit to your credit, there is also the emotional toll it takes of feeling like you have failed at your financial life. But here are the reasons I decided to take the plunge:

  • It’s a fairly common legal procedure used by many corporations and prominent individuals.
  • It would give me a fresh financial start
  • If used only once and NOT as a way of life… and if I could implement a new way to operate financially, in other words, live by the philosophy that if I couldn’t pay cash then I really couldn’t afford it, it would be worth it.

So I went ahead with it and got rid of about $35,000 dollars in debt minus school loans. Within 3 months of completion, I was receiving credit card offers.

I opened up a few lines of credit, maintained a zero balance, starting living within my means (which did require me to make adjustments like starting to use a budget), my credit rose from 550 to 683 in about 2 years. Not the best, but certainly good enough I thought to apply for a RV loan and get approved, even at elevated interest rates.

Applying for an RV Loan After Bankruptcy

rv loans after bankruptcy aclassrvsale

Boy was I wrong. So the time had come for me to move out of my travel trailer and into a Class A motor home. I had gone down to my Lazy Days dealership, had a great experience in choosing a RV, and was looking at a 2005 Damon Integra for around $30,000. I knew that I could afford the payments and thought hell, I might not get the best interest rate, but SOMEBODY would approve me.

I’m going to make a long story short. I had 5 different financial institutions decline my application. Reason given on every one…bankruptcy.

You see, it didn’t matter whether I could pay the loan or not, the stigma of bankruptcy on my financial record had left me dead in the water and nobody would touch me with a 10-foot pole, from credit unions to even lenders that dealt with bad credit.

It did not help that I didn’t have a huge down payment to put down, maybe that would have made the difference. It all led me to one conclusion.

Starting My RV Life Debt Free

I took it as a sign that perhaps I should start thinking about a debt free life. How great it would be to walk in and just purchase my RV outright….all mine free and clear. I began thinking about starting my RV life debt free.

How much easier it would be to not have a loan payment? How long would it take me to save up the money? How much of a discount could I get if I walked in all cash?

Living beyond my means and over financing things is what had gotten me in trouble in the first place. Committing to better money management and a debt free life would justify the humiliation of my bankruptcy and would make me feel like I learned the lesson.

So that is what I propose to do. Save the money up until I can buy my first rig with cash!

debt free aclassrvsale

How about you? Have you tried to acquire an RV loan after a bankruptcy and if so what were your experiences? Please leave a comment below.

 

 

 

4 thoughts on “RV Loans After Bankruptcy – Should You Try It?”

  1. I used to be a bill collector, and one of the hardest things to collect on was RV’s.  They depriciate so much, and are hard to repo, store, and sell.

    I wouldn’t think it would be that hard to get a loan for a car or house after bankruptcy, but an RV is a risk for any lender, regardless of the credit score of the requestor.  The collateral just doesn’t match the loan.

    I’m glad you are still motivated on getting your RV though, don’t let them stop your dreams! Did you ever think of getting a pop up?  Might be a good way to scratch your itch until  you get your RV money.

    1. Hi James. You make an important point. RVs are NOT looked at favorably by lenders as they are considered a luxury purchase. I’m going to have to put down a huge down payment or pay cash. This whole experience has had a silver lining though. It is what has guided me into deciding own my RV free and clear. No, can’t do the pop up…too small 😉 Thanks for your comment. 

  2. I know what debt feels like and it can be truly debilitating – the stress of people calling for money all the time is absolutely appalling. I have lived way beyond my means in the past and it is not a good way to go. If you can manage to save up and buy that RV that will be such an amazing feeling for you. I wish you the best of luck with saving! 

    1. Hi Lynne. Yes, drowning in debt is a horrific feeling. It has been very tempting to not have the patience to save for what I want and jump ahead into debt. That was what got me in trouble in first place. Teaching myself a new way of maneuvering financially is not easy, but it is totally necessary! The new motto is this: If I can’t buy it cash, I can’t afford it!

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