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 often a necessity. For car buyers who have gone through or are currently experiencing a bankruptcy, these needs are no different.
For Chapter 13 BK filers, the entire process takes three or five years, dependent on their repayment plan. That means that the chance there will be a need to purchase another vehicle during a bankruptcy will be much higher for consumers in a Chapter 13 than for someone who has filed for a Chapter 7 BK, where the discharge process can be completed in a matter of months.
How Bankruptcy Affects Car Buying Potential
Whether it's a Ch. 7 or a Ch. 13 bankruptcy, 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.
- In a Chapter 7, you are starting off with a "clean slate"…except for the fact that you have a BK listed on your credit report. Unless you had a previous auto loan that was either in good standing or was paid off, some dealers won't even think of considering your loan application. However, it is not unusual for car buyers who have completed the Chapter 7 process to start receiving credit offers only weeks after it has been discharged by the court. Be sure to bring your discharge papers with you to a prospective dealer.
- If you are in the middle of a Chapter 13 repayment plan, buying a car is a little more involved. You might have a more difficult time finding a dealer to work with and you will need to work with your bankruptcy trustee since you will be incurring additional debt, which will require your Ch. 13 agreement to be amended.
In either case, you will need to find the dealer who will be able to give you the best rates possible for your situation.
The Right Dealer Helps
Auto Credit Express has a vast network of car dealers who are qualified to help car buyers who have experienced a past or current bankruptcy. When you complete our fast, secure and easy online application, we will quickly connect you with the dealer who can work with your unique situation.
Don't let your past troubles stand in the way of getting the car you need. Apply today.