Filing for a Chapter 7 bankruptcy will affect your credit score, making it difficult to qualify for a lease afterward. While it’s not impossible, you should know that qualifying for a lease won’t be easy.
Steps Toward Getting a Lease After Bankruptcy
Before you apply for a car lease, you’ll need to make sure your bankruptcy has been discharged. A Chapter 7 bankruptcy usually only lasts three to five months, and the only way you’ll typically be able to lease another vehicle is if you reaffirmed your current loan or lease during the bankruptcy. If you’re considering either financing or leasing a car, you’ll need to do these three things:
- Wait until you’ve been discharged – Before you head off to a dealership, your Chapter 7 bankruptcy must be complete. After you’ve received your discharge papers is when you can consider finding a car. While it’s possible to get a vehicle while still in a Chapter 7 bankruptcy, most lenders will want to see that it’s been discharged.
- Check your credit and finances – Your credit score will take a hit once you file for bankruptcy, so make sure you know where you stand. Pull your credit scores and reports. You’re entitled to a free copy of your credit report every 12 months from each of the three credit bureaus. Also, make sure you have enough income to handle a car payment. You can find this out by using online budgeting tools. Remember, even though a Chapter 7 bankruptcy will stay on your credit report for 10 years, your credit score can still improve over time, which will give you a better chance of approval.
- Consider other options – If your credit isn’t good, leasing may be off the table for you. While it may seem heartbreaking, the good news is there are other options to consider. When your credit is poor, the best option may be to look for a subprime lender to work with. Subprime lenders are capable of helping credit-challenged buyers finance a car. You may not need a vehicle right now, but, in the end, financing can help you improve your credit if you make your payments on time. You can always finance one now, and apply for a lease when your credit has improved.
Leasing may be an attractive alternative to car buying, but you more than likely won’t qualify for one if you’re dealing with bad credit. If you want a vehicle, your best bet is to take out a subprime auto loan, and possibly refinance once your credit has improved down the road.
If you need to know where to turn for a special finance dealer that can help you get the financing you need, Auto Credit Express wants to help. We work with a nationwide network of dealers that have the lending resources available to handle unique credit situations, including bankruptcy. Let us guide you toward a local dealer today. Get started by filling out or free online auto loan request form.