Bankruptcy is a scary prospect, and it's natural if you find yourself worrying about what will happen to you in the future. However, filing for bankruptcy can give you the second chance you need, and once you file, those pesky bill collectors cannot call and harass you any longer.
Bankruptcy is a legal procedure that helps people who owe large amounts of debt to their creditors either reduce the amount that they owe or get rid of it completely. When you file for Chapter 7, the court will eliminate most of your debts from your credit report. However, alimony, child support and most student loans are not covered in a Ch. 7. Chapter 13 bankruptcy requires you to work with a court trustee and your creditors to reduce the amount that you owe. The court trustee will develop a payment plan that will settle your debts for a lower amount. This amount will be based on your income and living expenses.
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When you are discharged from your bankruptcy case, this leaves you with a "clean" slate - all of your debt is behind you. But you are left with a mark on your credit that will remain on your report for 7 (Ch. 13) to 10 (Ch. 7) years. You no longer owe money to your creditors, and they can no longer contact you about those past debts.
During the bankruptcy proceedings, the court will look at your assets and determine if you can sell your assets to pay your debt. You may have to surrender a vehicle that you purchased and still owe money on in order to reduce the total amount of your debt. If you have an upside down car loan that you still owe on, surrendering your car is a good option. Getting a new car after surrendering your current one during an open bankruptcy isn't easy, but it is possible.
In an open Chapter 13 case, you will meet with the court trustee and explain why you need a low credit car loan. For example, you could point out that you need reliable transportation in order to commute to work and to get your children to and from important events. From there, the trustee will determine how much you will be allowed to spend on the purchase. The reason you may be allowed to finance a car before your discharge is that a Ch. 13 remains open during the 3 or 5 year repayment period, and it is understood that you may need access to a dependable vehicle before this time is up.
If you have a Chapter 7 Bankruptcy, getting a loan after your discharge is possible, even if the BK is still on your record. You just need to be sure you have your discharge papers handy.
We realize that the last thing you want to hear after a bankruptcy is "no," and you still have the right to a reliable car. This is why the team here at Auto Credit Express will do everything possible to find dealers who will work with you regardless or what type of bankruptcy you are dealing with.
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