Too often we hear of Indiana residents keeping their vehicle during bankruptcy or buying from a pay as you go finance company because they don’t believe there is anyway to obtain auto financing after an Indiana bankruptcy. This is far from the truth.
It is true that auto loans after bankruptcy are harder to come by because of the high risk to the lender, but they are readily available to those that know where to look. Here at BankruptcyAutoFinancing.com we work with a network of Indiana subprime lenders that are willing to work with clients in any credit situation; including bankruptcy.
Mistakes Often Made by IN Bankruptcy Clients
Two big mistakes we see frequently made by bankruptcy clients:
- Reaffirming the current car loan despite being upside down.
- Buying from a buy here pay here dealer.
Reaffirming a debt, like your car, in bankruptcy is one way to ensure that you keep your car in chapter 7. This means you are making a deal with the current lender stating that you will continue to pay the loan as is. If you happen to fall behind the lender then has the legal right to repossess the car regardless of the bankruptcy.
While a reaffirmation agreement is a great way to keep your car it’s not always the best financial decision. If you are upside down on the loan (meaning you owe more than the car is worth) reaffirming would be a bad choice. Bankruptcy gives you the option to walk away free and clear from an upside down loan and that is usually recommended.
Indiana Buy Here Pay Here Dealerships after Bk
Buy here pay here dealerships in IN offer in-house financing, meaning they don’t use a third party lender. This is typically where people with bad credit and bankruptcy run to because they rarely do a credit check.
This may sound great, but is it really? Instead of having a monthly payment you have either a weekly or bi-weekly payment, and should you be even one day late on the payment many BHPH dealers can disable the engine with a GPS device in your car, and repossess it. Most importantly, many of the Indiana BHPH dealers also don’t report to the credit bureaus meaning even if you are paying on time, your credit score will not increase.
If you’re thinking about filing for an Indiana bankruptcy and you know you are currently upside down on your car, consider surrendering it. You could walk away free and clear from the loan, and be approved for a new one. Submit our free and easy application today to see what you could be approved for.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.