There’s not much difference between getting a car loan after bankruptcy than before you filed, except, of course, the type of lender you may need.
Post-bankruptcy Auto Loan Lenders
Now that your bankruptcy is discharged, you’re probably going to need a loan from a subprime lender. Even though you’re starting with a clean slate as far as your credit goes, your credit score will be lower due to the bankruptcy. Subprime lenders look beyond your credit score to other factors that help them consider your application for an auto loan. If a lender does approve you, your interest rate is going to be higher than it would be on a traditional loan.
Financing a Car after a Chapter 13 Bankruptcy
Subprime lenders have a set of requirements that you have to meet before they approve you for a loan. This includes providing proof of income and residency, as well as a list of personal references, proof of a working phone (other than a pre-paid cell phone), and a valid driver’s license. Having these things shows lenders that you have the ability and stability necessary for a car loan payment.
Before you get auto financing after a Chapter 13 bankruptcy, you need to make sure that your discharge shows up on your credit reports. If it doesn’t – or hasn’t yet – and you can’t wait, you’ll need to bring a copy of your bankruptcy discharge to the dealership with you, along with the other documents.
A Chapter 13 Dismissal
Your Chapter 13 bankruptcy is discharged once you’ve successfully completed the terms of your repayment plan. If your bankruptcy was dismissed, rather than discharged, this automatically disqualifies you from getting a car loan from a subprime lender, at least right now. A dismissal means that you weren’t able to successfully complete the terms and conditions of your bankruptcy and it was thrown out by the court.
Finding a Lender After Chapter 13
If your Chapter 13 bankruptcy has been discharged, you should know that not all dealers have the ability to work with consumers who have been through a bankruptcy. It can sometimes be confusing to know where to turn, but at Auto Credit Express, we can help with that.
We work with a coast-to-coast network of special finance dealers that have lenders specializing in helping people through credit struggles when they need a car. Fill out our simple auto loan request form and we’ll help take the confusion out of finding a dealer that can help.