If you didn’t know, consumers can get a car loan right after filing for Chapter 7 bankruptcy. Typically, consumers find themselves more likely to be approved for an auto loan after they complete the process, rather than before.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can offer you the fresh start you need. However, filing for Chapter 7 bankruptcy is not something that should be taken lightly.
Most Chapter 7 filings take anywhere from four to six months to be complete.
Many experts often refer to Chapter 7 bankruptcy as liquidation bankruptcy, since the bankruptcy trustee is required to sell off all of your “non-exempt” property.
Almost all debts will be wiped out when you file for chapter 7 bankruptcy. However, if your bankruptcy case was dismissed, you will not receive any of the benefits Chapter 7 bankruptcy has to offer.
Additionally, you will not be refunded the costs associated with filing.
Getting an Auto Loan After Filing for Chapter 7
Finding financing for an auto loan post-bankruptcy is not as difficult as it seems. In order to qualify, you may have to find a subprime lender that works with consumers who have poor or no credit.
These subprime lenders may charge you a higher interest rate than an applicant with a healthy credit score.
Bankruptcy and Buy Here Pay Here Dealerships
If all else fails, you can search for a Buy Here Pay Here dealership. A BHPH dealership is a type of dealership that works with consumers who may have less-than-perfect credit.
At BHPH dealerships, the vehicles tend to be older with much higher mileage than a conventional auto dealership. Although a BHPH dealership is a good last resort, there are some things to be aware of.
BHPH dealerships tend to charge extremely high interest rates on “un-desirable” cars.
Most BHPH dealerships also require consumers to make their car payments right at the dealership, meaning you’ll be required to stop by the dealership once or even twice per month to make payments.
Getting a car loan after filing for Chapter 7 bankruptcy may be difficult but not impossible. If you are looking to buy a new car but have less than perfect credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations.
Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!