If you are facing an incredibly large amount of debt, you may want to consider seeking relief through either debt consolidation or bankruptcy. Which measure would be best for your situation?
Responsible credit card use can lead to a healthy credit score. On the other hand, credit card mishandling can lead to a financial disaster. Make sure that you act quickly if you discover that you’ve accumulated a significant amount of credit card debt.
The approval process during a Chapter 13 will take longer than that of a typical car loan. Because of the extended timeframe, there can be issues with your vehicle selection since it is risky for dealers to hold on to inventory, as there is a chance that you will not be approved for the purchase by the court trustee.
When you are discharged from a Chapter 7 bankruptcy, you are essentially starting with a clean slate, aside from the fact that you will have a black mark on your credit report from the filing for up to 10 years, potentially making it hard to find a lender who will approve you. However, if you did have previous auto loans that were in good standing or have paid off a vehicle since you filed your Chapter 7, you will have better chances getting approved by a lender. You just need to make sure you are working with a car dealership that has a financing team that knows how to work with unique financial situations.
While it may not be ideal to incur new debt while involved in a Chapter 13 repayment plan, sometimes it is necessary. For example, if you require regular access to reliable transportation, you may have to purchase a car. If you do need to get financing for a vehicle purchase while in the middle of Chapter 13 bankruptcy, there is a procedure that you must follow.
Buying a car is a basic need in today’s times. If you’re part of the general workforce or have a family, a car is a necessity. For car buyers who have gone through or are currently experiencing a bankruptcy, these needs are no different. However, your credit will be negatively affected. Many car dealerships will have difficulty getting you approved for a loan, if they can at all. With that said, there are some differences and there are options for you.
After going through a bankruptcy, you may be wondering if buying a new car will ever be possible. The good news is that bad credit isn’t forever, and full recovery from either a Chapter 7 or a Chapter 13 bankruptcy is entirely common.