If you've filed for bankruptcy you may be feeling as if you'll never get approved for another line of credit again. Fortunately, that is not true. At Auto Credit Express, we have been helping bankrupt clients find a bad credit car dealership in their area to approve them for vehicle financing, since 1999. Bankruptcy isn't the end of the world. It's a new beginning to financial stability.
After you have filed your bankruptcy papers with the court, your bankruptcy is now considered open. It will remain that way until you receive your discharge papers from the judge. Open bankruptcy auto loans are available during this time with both Chapter 7 and Chapter 13 bankruptcies, but with different requirements.
A chapter 7 bankruptcy is open for approximately three to four months making the process a little more rushed. Before you can apply for an auto loan through any subprime lender, you must make sure that your meeting of creditors has taken place. Legally, this is called the 341 meeting and allows the creditors listed on your bk papers to ask you questions about your debts. Lenders wait for this meeting to be completed before offering financing to debtors because:
After you have proof of completion, you can then apply for an online pre-approval at AutoCreditExpress.com.
If you've filed for Chapter 13, you have a little more leeway when it comes to car loans during bankruptcy. This process is much longer, lasting usually between three to five years. The judge will set up a payment plan based on your income, and you will repay a portion of your debts over the life of the bankruptcy. If you plan to apply for financing of any kind during this time, you must gain permission from the judge.
Compile a list of reasons as to why you need a new vehicle to present to the judge. For example:
Once you have complied your list you must then file this with your trustee or bankruptcy judge. This is called a Motion to Incur Additional Debt. The judget may ask you questions about the vehicle you're inquiring on purchasing, and he/she can also make stipulations to the loan terms, including how long the loan is, what your interest rate can be, and what your monthly payment must be. If the judge accepts your motion, you will receive an Authorization to Incur Additional Debt. Once this is obtained you can apply online for a pre-approval and visit a dealership!
Taking out a new line of credit can be stressful regardless of what your credit score is, but when you have a recent filing on your report your anxiety level can sky-rocket. You don't know how long you should wait, if you should wait, or if there is even a chance for an auto loan approval until the proceeding falls off your credit report. We are here to tell you, you dont have to wait at all.
At Auto Credit Express, we understand that many times it is not feasible for you to wait weeks, months or years before taking out an after bankruptcy auto loan. This is why our network of lenders can offer you auto financing as soon as your discharge papers are in your hand. While most of our bad credit car dealerships offer both new and used vehicles, we highly recommend purchasing a pre-owned car, truck, SUV, or minivan. Late model automobiles generally offer the following benefits:
The used cars offered on our dealers' lots are not the old, junky, poor quality, barely running automobiles you may be thinking about. Instead you will be financing a vehicle that is reliable, well running and has low miles.
"I never had anyone work so hard to find the best deal for my situation." Deborah S., Ovid
If you're filing for bankruptcy and you're not ready to give up your vehicle just yet, you have options to keep it. If you have more equity in the car than your state allows you to exempt, you must surrender your vehicle to the bankruptcy unless you reaffirm, redeem, or cram down the loan.
Redeeming your auto loan allows you to lower your loan balance to the fair market value of the vehicle. This is court ordered by the judge and the lender must oblige by the ruling. The correct fair market value of the vehicle will be determined by the judge, you, the lender, and the help of websites such as Kelley Blue Book and NADA.
The cram down process is only available in a chapter 13 bankruptcy and works in the same way as the redemption. The lender is forced to "cram down" the loan balance to the fair market value of the vehicle. The major difference is the fact that you are not eligible for this process if you have not owned your car for at least 910 days or 2.5 years. This is to protect creditors from granting a poor credit score auto loan to a consumer and then having them include the vehicle in the bk to get out of the debt.
If you decide to reaffirm your loan, you are signing a legally enforceable contract to repay the entire loan balance, as if the bankruptcy was not occurring. Both the creditor and debtor must agree on the terms, and usually a lender will not sign this document if you are currently behind on your payments, or have a history of late payments.
Before you make any decisions about keeping your vehicle, you must first gain permission from either the trustee or the judge working on your case. They must see that keeping the debt is not going to create a financial hardship on you or your family.
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Whether you have decided to keep your vehicle during the bankruptcy process, or you have recently gotten a new car loan after bankruptcy from a buy here pay here, tote the note or other type of car dealership, you may be thinking about refinancing. Is it even possible with a bk on your credit report? Absolutely! Auto loan refinancing post bankruptcy is available to you regardless of whether you were recently discharged or you completed the bankruptcy years ago.
Refinancing your vehicle works in the same way as refinancing your mortgage, except less paperwork, and usually there are no fees associated with it. It provides many benefits to you, such as:
Sometimes you need to seek a new lender. While many lenders will refinance their own loans, if you qualify, some do not. In cases such as these, a rejected refi application is usually based on the recent bankruptcy still showing on your report. Here at AutoCreditExpress.com, that doesn't matter to us. As long as you have showed good faith on your open credit accounts since your bankruptcy, and you have improved your credit score, we can get you approved with one of our lenders.
If you've filed for bankruptcy protection in the past, the chances of you having a lot of cash for a down payment lying around is low. This is why we can help you find low down payment bankruptcy auto financing.
Putting money down on a car reduces the amount you are financing, which in turn reduces the interest charges and monthly payment. If you dont have the cash saved, you can do one of the following:
These are all feasible ways to achieve the money to put down on the used vehicle you have your eye on. Remember, the more you put down initially, the more money you are saving over the life of your loan.
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Your credit score is one of the most important factors when it comes to leasing or financing a car, and rebuilding your credit with a bankruptcy car loan is simple. Your score is constructed of many different things, including installment loans and revolving credit. An auto loan is an example of an installment loan, meaning you pay a fixed amount for a fixed number of months.
Our bankruptcy used auto loans are generally offered at 36 to 48 month terms, and with competitive low interest rates. This makes them affordable to you every month, so you don't fall behind, and you can pull your credit score back up the ladder in no time.
If you've filed for bankruptcy, and you're looking for a good way to start rebuilding your credit profile, Auto Credit Express can help. Whether you've filed for Chapter 7 or Chapter 13, and you're discharged or still in the process, we will set you up with one of our many dealerships accepting bankruptcy clients.