If you’re in the middle of an open Chapter 7 bankruptcy, you may find it difficult to get the auto financing you need. It’s suggested that you wait until your bankruptcy has been discharged because it's difficult to find a lender who'll finance you during an open Chapter 7.
Three Steps to Take Before you Apply
Having an open Chapter 7 bankruptcy does lower your chances of getting approved for an auto loan. A Chapter 7 bankruptcy is shorter than a Chapter 13 – usually only lasting a few months. Lenders prefer your bankruptcy be discharged, but if you need a car as soon as possible, there are three things you’ll need to do:
- Meet with the trustee – The first step to take is to meet with your trustee and complete the initial 341 meeting. This must be done within 30 days of filing, and the trustee will examine all of your debts and assets during the meeting. Technically, you're eligible to apply for a car loan after this meeting has taken place.
- Get permission – Before you try and buy a car, make sure you get permission from the court. If the court finds any indication that you financed a car in an open bankruptcy without their consent, they can force you to surrender the vehicle or dismiss the bankruptcy.
- Be realistic – Understand that you may not be able to finance the car of your dreams if you’re approved. In most cases, you should consider buying a reasonably priced car that meets your needs and fits within your budget.
While it's best if you wait until the bankruptcy is discharged, you can follow these steps to try to find financing during an open Chapter 7 bankruptcy. If you really need a car and are unable to wait, you can also go to a buy here pay here dealership because they typically don't check your credit.
Find the Right Dealership
The final step to take is to find the right lender to work with you. At Auto Credit Express, we know it can be difficult to find auto financing during bankruptcy, and that’s why we want to help credit-challenged consumers.
We have compiled the nation's largest network of special finance car dealerships. These places work with lenders who understand credit issues such as bankruptcy. We want to connect you with one in your area free of charge to help you get back on the road. Begin the process by filling out our free and secure car loan request form today.