Filing bankruptcy is not a choice most Ohio residents would make unless it was their only one to make. Unfortunately with the economy just now bouncing back it has become their only option. Although it can damage your credit score and cause higher interest rates when applying for car loans and car insurance after bankruptcy it’s nothing to be ashamed of.
Ohio Insurance Rates Likely to Raise after Bankruptcy
All of your financial transactions are affected when you file for a personal bankruptcy in Ohio and your auto insurance policy is no different. While there is not a direct yes or no answer to whether your premium will increase it is very likely.
If you looking to finance a car after bankruptcy and checking out insurance policies chances are the company will do a credit check and see that you have a recent bankruptcy on your report. This raises a red flag to them as they consider it to be a high risk. You most likely won’t be turned down for the policy, but you will pay higher premiums.
If you were able to keep your car in bankruptcy and already have an insurance policy in place then you premiums may not change until it is time to renew them. This is because most Ohio companies only do a credit check when the account is opened or at the annual renewal. Unfortunately, that means once it’s time to renew the policy they will see the bankruptcy and likely raise your premium.
Benefits of Ohio Bankruptcy
Filing for an Ohio personal bankruptcy is not all bad. While it does make it harder to find a dealership accepting bk clients and raises your interest rates it can also help you to rebuild your credit score.
Chances are if you were faced with the decision to file for an Ohio bankruptcy your credit score was already pretty low; bankruptcy provides you with a fresh start. Your debt is wiped out and your can get new lines of credit – like a car loan or secured credit card – to help you get your credit score where you want it.
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.