Filing for a Chapter 13 bankruptcy can be a very complicated and emotional process. You are already in a very difficult situation. It could become even more challenging if you need a vehicle after filing.
However, purchasing an automobile is not impossible if you have this type of bankruptcy. It is possible for you to buy the car that you need if you meet certain requirements. Following several steps and working with the right auto lenders may allow you to get back on the road quickly.
Don’t Lose Hope
Many people that have filed for a Chapter 13 bankruptcy automatically think that they are in a hopeless situation when it comes to buying a vehicle. This is often not true. Be positive and look into your options. Several lenders specialize in bad credit financing and will potentially work with you.
Know the Requirements
Before beginning the process of buying a car, do your research and know the requirements that you have to meet to make the purchase work. Courts often mandate that you must wait for your bankruptcy discharge, which will not be entered before your repayment period is over. This lasts either three or five years.
If you are unable to wait that long, you can also ask your trustee if you can petition the court for permission to take out a car loan (incur additional debt) while your bankruptcy is still in process. This is often necessary when your car is no longer drivable and you need one for work.
Create a Plan to Buy
The first step of the Chapter 13 car buying process is to find a car dealership that specializes in working with individuals that have filed for bankruptcy. After you have completed the application process, you will meet with the dealer to select a specific vehicle that falls within your price range.
Once you have selected a vehicle, the dealership will give you paperwork that specifies the loan terms and car information. You will then present this to your trustee. If the trustee agrees, you petition the court.
If your petition is approved, you can then take the court order to the dealership that you have been working with. The sale can then proceed like normal on the particular car that was described in the document that you gave to your trustee and the court.
Be Flexible and Expect to Pay
It is very important that you have an open mind in the Chapter 13 bankruptcy car buying process. The dealership that you will be working with will present you with car options that you can choose from. Like most bad credit auto loans, you will not pick out a vehicle beforehand. This is why it is important to be flexible on what you are willing to buy.
Furthermore, you also must also be prepared to pay a higher than normal interest rate. Auto lenders will typically charge you a higher rate because you are currently in a Chapter 13 repayment program.
Begin the Process with Us
Buying a car during or after a Chapter 13 bankruptcy can be difficult. Our team at Auto Credit Express can make this process easier. We do this by matching you with a dealership that gives you the best shot at an auto loan approval.
Thousands of people have had success with us in the past. Find out how we can potentially assist you now by completing our application form. One of our representatives will be quickly in touch with you after it is received.