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.
A Dismissed Bankruptcy
We've spent the past twenty years, here at Auto Credit Express, helping car buyers with various types of credit issues. So, it should come as no surprise that we typically receive two hundred or more questions each month — most of them from consumers with bad credit who want to know how (or if) they can get a car loan.
Some of these questions, like one we received last month, are from consumers who have gotten themselves into even more trouble credit-wise than when they began the credit rebuilding process. Here is one of those questions:
"My Chapter 13 is being dismissed. Can I still get financing? Thank you."
There are a couple parts to this question, so let's begin.
We Are Not a Lender
To begin with, it seems that this person believes that Auto Credit Express is a lender. We are not. The service we offer matches people with bad credit to dealers in their area who are signed up with a wide range of lenders.
What a Dismissed Bankruptcy Means
Once you've filed for bankruptcy, you are required to follow all the rules and procedures set by the court. If your bankruptcy is discharged, it means you have successfully completed this process.
But a dismissed bankruptcy means you have not fully completed the process. According to the law-related website Nolo, a bankruptcy case can be dismissed without prejudice or with prejudice.
If your bankruptcy is dismissed without prejudice (this usually means you haven't filed the right forms or have made some other kind of procedural mistake), you can refile your case right away. At the same time, you'll also have to fix any problems that might have led to the dismissal. Nolo also notes that you should also "file a motion to extend or impose the automatic stay in your new bankruptcy."
But according to Nolo, if your bankruptcy is dismissed with prejudice, it could mean any number of things including:
- Committing bankruptcy fraud by hiding assets or lying on your bankruptcy papers
- Filing numerous bankruptcy cases to delay or hinder your creditors
- Willfully disobeying the court’s orders
- Otherwise abusing the bankruptcy process
Subprime Lenders and a Dismissed Bankruptcy
For the most part, subprime lenders don't care what kind of dismissal it was. Neither one of them looks good on your credit report if you're trying to get a car loan. The reason for this is simple: if you couldn't follow the rules set by the court and make timely payments on the plan the court arranged, how can a lender reasonably expect you to make regular monthly payments on a car loan?
It's just that simple.
The Bottom Line
The bottom line is this: if you're having problems making payments to the court under a bankruptcy plan, you need to contact the trustee immediately. If your case is dismissed, the only alternative you'll typically have is with a buy here pay here car dealer.
If, on the other hand, you don't have this problem but you do have poor credit and you're worried about getting a car loan, Auto Credit Express is here to help. We have a nationwide network of car dealerships that have the lenders and know-how to help people in all types of credit situations.
Our service is free, fast, and there's no obligation. See what we can do for you by filling out our car loan request form today.