Financing a vehicle after your bankruptcy has been discharged is usually not a problem. But you will find it very difficult to get approved for a car loan if you have a dismissed bankruptcy.
Financing your first car following a bankruptcy can be a scary proposition. However, getting an auto loan is very possible if you are working with the right lender. Plus, a car loan is one of the best credit building tools around. But there’s a right way and a wrong way to go about it, so make sure to check out our tips for getting an auto loan after a bankruptcy.
A bankruptcy stays on your credit report for up to seven or ten years, depending on if you filed for Chapter 7 or Chapter 13. However, that doesn’t mean that your credit has to stay down all that time. You can start rebuilding your credit after bankruptcy right away.
Here at Auto Credit Express, we specialize in helping people with bad credit find auto financing. For this reason, we are constantly getting asked about auto loans for people in all types of challenging credit situations. Getting approved for an auto loan in an open bankruptcy is one such of these topics.
Reaffirming a car loan involves committing to a restructured contract. And with reaffirmation, the lender won’t be permitted to repossess the vehicle as long as you’re making payments.
If you enter a Chapter 13 bankruptcy with negative equity in a car that you’ve financed, you may qualify for a loan cramdown if you meet certain requirements.
If a lender sells a repossessed or surrendered car at auction, the selling price may not cover the entire loan balance. If it doesn’t, the amount left over is called a car loan deficiency.