If you’re going through a bankruptcy in New York City, there are two possible outcomes you could face: discharge or dismissal. If your bankruptcy is discharged, it means you’ve completed all the requirements. Dismissal, however, means that something didn’t go according to plan and your case was thrown out. It's more difficult to finance a car after a bankruptcy dismissal in New York.
Bankruptcy in New York City
Whether you filed a Chapter 7 or Chapter 13 bankruptcy, the goal is to get through the process successfully and get it discharged. When your bankruptcy is discharged, it means that you followed the process and completed what the court required of you, which leads to most remaining unpaid debts going away.
In New York City, no matter how prepared you think you are, sometimes things don’t go according to plan. If things go south during a Chapter 7 or Chapter 13 bankruptcy, it could lead to a dismissal instead.
Dismissals aren’t usually planned, and can be triggered by something small like a paperwork error, or something large like bankruptcy fraud. Dismissals can be either voluntary or involuntary, and filed with or without prejudice.
Voluntary dismissal is rare, but it happens when someone decides they don’t want to go through with the process, or are having trouble meeting the court's conditions. Involuntary dismissal is much more common.
Dismissals filed without prejudice are typically triggered by something small like incorrect details in filing paperwork. However, there are larger incidents that cause a dismissal, and they can have dire consequences.
These things, such as disobeying court orders, abusing the bankruptcy process in order to dodge your payment obligations, or bankruptcy fraud, can be grounds for dismissal with prejudice. This means you’re going to be responsible for all your debts, and could face serious legal action that could result in fines or even jail time.
The good news is that dismissals caused by paperwork errors and oversights can be easily corrected and don’t stand in the way of refiling. Bankruptcies that are dismissed with prejudice don’t clear up so quickly, and you may be barred from refiling for 90 days, a year, or life, depending on the severity of the situation.
Buying a Car after Bankruptcy Dismissal
Getting approved for an auto loan is much more difficult after a dismissed bankruptcy. There are two types of places to start looking for your next car loan in NYC if this is the situation you find yourself in: special finance dealerships or buy here pay here (BHPH) lots.
Special finance dealers are signed up with lenders that work with people in many types of tough credit situations. These subprime lenders use other factors in addition to your credit score when considering you for an auto loan. This means there’s a chance you may still qualify for financing even with a lower credit score and bankruptcy dismissal on your credit reports.
BHPH dealerships, on the other hand, often don’t check your credit at all. This makes them better suited to approved applicants with a dismissed bankruptcy, as they won't even be aware of its existence. Instead, these places determine approvals using your income.
However, since filing for bankruptcy typically means you’re already having trouble paying bills, financing a vehicle may not be the best option. You might be better off buying something in cash, either from a car lot or a private seller.
Ready for a Car Loan?
The impact a bankruptcy has on your credit score lessens over time. So, whether you call the city Gotham or Metropolis, look no further than Auto Credit Express when you’re ready to try for an auto loan.
We’ve been helping people get connected to the dealers that can help for over 20 years, and we want to help you, too. Simply fill out our fast, no-obligation car loan request form, and we’ll get to work matching you to a local dealership!
