Going through a bankruptcy can give you a financial fresh start, but it lowers your credit scores. Once finished, you may think it might be next to impossible to get approved for credit again, but that's typically not the case. At Auto Credit Express, we specialize in helping people get connected to local dealerships that know how to work through unique credit situations.
It can be difficult to build your credit back up following a setback like this, but getting a car loan after bankruptcy is possible. A bankruptcy car loan is a good way to help your credit recover once you've received a discharge from a Chapter 7 or Chapter 13. The process of getting a car loan following a discharged bankruptcy is fairly simple.
Struggling with debt? Learn more about filing for bankruptcy protection and find out if you qualify for a free case evaluation.
A Chapter 7 bankruptcy is considered a liquidation bankruptcy. This means your nonexempt personal assets can be taken and sold in order to pay off your debts and provide a fresh start. A Chapter 7 bankruptcy is relatively quick, and typically lasts only three to six months before it's discharged, but the bankruptcy filing stays on your credit reports for up to 10 years.
If you file for Chapter 13 bankruptcy, you set up a repayment plan of either three or five years in which you pay back all or part of your debts. This happens under the court's protection, so you pay a fixed monthly amount to your bankruptcy trustee, which is then distributed to your creditors. The biggest advantage of this type of bankruptcy is that you have the opportunity to retain your property and assets. A Chapter 13 bankruptcy filing stays on your credit reports for up to seven years, but there are auto loan options to explore during and after it.
If you're going through or have filed for bankruptcy Auto Credit Express can help.
If you have a car loan when heading into a bankruptcy, you have a decision to make. You can either include the car loan in the bankruptcy and surrender your vehicle, or try to keep it using a few different methods. Surrendering your vehicle means giving up your rights to the car, but you're no longer responsible for the loan balance after discharge. If you're not ready to give up your vehicle, you can try to redeem, reaffirm, or cramdown the loan.
With a car loan, you can begin to rebuild your credit scores, which may be low after going through the process of bankruptcy. Your credit can improve if you make your loan payments in full and on time. Because your discharge should have wiped away any remaining debts, completing an auto loan goes a long way toward restoring your credit and building a strong payment history.
When people find themselves drowning in debt, there often comes a point when enough is enough. Your first instinct may be to grab that life preserver called bankruptcy. If you’ve reached this point, however, there are other options to consider and you should weigh them all very carefully.
Thinking about applying for car loan in Seattle, but have a recent banrkuptcy on your credit report? Auto Credit Express can help you get approved for auto financing after bankruptcy, or even during your bankruptcy process.
Buying a car after bankruptcy doesn't have to seem an impossible chore. Here are some tips to turn your credit around and get a car after bankruptcy.