Many people ask us, "If I am in an open chapter 7 and need a car loan, are there any lenders who will work with me?" In most cases, the answer is no, because the bankruptcy court won't allow you to incur new debt during this time. However, that doesn't mean that you can't take the steps necessary to obtain a loan once your bankruptcy is discharged.
Chapter 7 Bk Auto Loans
Because Chapter 7 bankruptcy is complete in just a few months, most Chapter 7 bk auto loans are issued once the bankruptcy has been discharged. While your bankruptcy is still open, you may have to resort to public transportation if you don't have another vehicle available. You can use this time to start looking for car financing services, such as BankruptcyAutoFinancing.com, that help people with bad credit get the auto financing they need.
Once your bankruptcy is discharged, it will be easier to obtain an auto loan. You will probably find, however, that local banks and credit unions won't extend financing to you because of your credit history. So where does that leave you?
You might be tempted to head to a local car lot that has a sign out front promising "We finance everyone." What you need to be aware of though, is that these Buy Here Pay Here lots often charge very high interest rates on high mileage cars that are unreliable. They also aren't very lenient when it comes to late payments either, and will often repo the car if you're even one day late.
Luckily, there are other options available. Here at Bankruptcy Auto Financing, we have a vast network of lenders and dealers who work with bankruptcy clients. You may even be able to drive off the lot in a quality pre-owned vehicle the same day you apply for a loan using our easy online application.
Re-establishing Your Credit After Bankruptcy
One of the most important things you can do is work on re-establishing your credit after a bankruptcy. Since all of our lenders report your on-time payments to the major credit bureaus, you will be doing just that when you use our services to obtain an auto loan. Think of this as your first step to getting back on the road to financial success.
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.