After you’ve been through Chapter 7 or Chapter 13 bankruptcy in Los Angeles, lenders may jump at the chance to get you the post-bankruptcy car loan you’re looking for. Be aware, however, that getting an auto loan after bankruptcy means you most likely need a bad credit car loan, and the process may not be as cut and dried as you’re used to.
Your Credit after Bankruptcy
After you go through a bankruptcy, your credit suffers. The higher your credit score was to begin with, the further it's likely to fall as a result of bankruptcy. Like most delinquencies, bankruptcy stays on your credit reports for up to seven to 10 years, depending on the type of bankruptcy you filed.
Chapter 13 bankruptcy, which takes three or five years to complete, allows you to repay at least some of the debt you’ve accumulated before wiping the rest out, and remains on your credit reports for seven years from the filing date.
A Chapter 7 bankruptcy, on the other hand, is a short process that generally lasts three to six months without the benefit of a repayment plan. Since your debts are typically wiped out, the Chapter 7 bankruptcy stays on your credit reports for 10 years.
Even though the bankruptcy remains listed on your credit reports, its impact on your credit score lessens over time. Regardless of which type of bankruptcy you filed, you’re allowed to apply for an auto loan – typically a bad credit car loan – immediately following your discharge.
Bad Credit Car Buying in Los Angeles
What does it take to get a bad credit auto loan in Los Angeles? The requirements vary by lender, but you generally have to meet these qualifications in order to be considered for a post-bankruptcy car loan:
- A minimum income requirement – Lenders usually require you to make a minimum of $1,500 to $2,000 a month before taxes from a single source of income. You have to provide proof of income with a recent computer-generated paycheck stub as well.
- A minimum employment requirement – Bad credit lenders generally require that you’ve been at the same job for at least six months, and have a three-year employment history with no large gaps (over 30 days) between jobs.
- Proof of residency – Lenders require you to prove that you live where you claim to by bringing in a recent utility bill in your name at the address listed on your application.
- Proof of a working telephone – Poor credit lenders must be able to contact you, and require you to have a working landline or contract cell phone in your name. You have to bring in a recent phone bill to serve as proof.
- A list of personal references – You typically need a list of five to eight personal references complete with names, addresses, and phone numbers.
- A down payment requirement – When you have bad credit, you’re usually required to make a down payment on an auto loan. The requirement varies by lender, but, at a minimum, they’re going to ask for $1,000 or 10% of the vehicle’s selling price, whichever is less.
Getting a Car from the Right Dealership
Getting a post-bankruptcy car loan isn't like getting one when you have good credit. In fact, there are a lot of requirements you may not be used to if you haven’t needed a bad credit auto loan in the past.
Fortunately, there’s a large network of dealership in and around the City of Angels that work with lenders that help people with post-bankruptcy car buying. When you need to find a dealer, Auto Credit Express is here.
We're partnered with a network of special finance dealerships all across Los Angeles, the state of California, and the rest of the country. These dealers are signed up with the lenders you need to realize your car buying dreams in Tinseltown.
Don’t wait any longer! Simply fill out our fast and free auto loan request form and our knowledgeable staff can get the process started for you.