Automobile loans are one of the most common types of loans in the country and for good reason. Most individuals need reliable transportation in order to make a living. One of the major concerns of individuals who file Chapter 7 bankruptcy, is the question of if they will be able to obtain a car loan after they file. While you must wait at least until you receive your Chapter 7 discharge, which typically it takes place 60 days after your 341 meeting of creditors, you can begin applying for financing on an automobile after that.
Obtaining Financing After Chapter 7
Yes, you can obtain an automobile loan shortly after being discharged from Chapter 7 bankruptcy, but it may be more work to find a suitable lender. Furthermore, you should definitely prepare yourself to pay much higher interest. After filing Chapter 7 bankruptcy it will remain on your credit report for up to 10 years. Additionally, if you had decent credit before bankruptcy, your credit score most likely took a drop. Because of these two factors, you’ll need to find a lender willing to work with “bad or no credit lending” policies. These types of financiers charge a higher interest rate for individuals deemed high-risk borrowers.
Re-establishing Credit After Bankruptcy
A step toward obtaining a car loan after bankruptcy is beginning to rebuild your credit. If you have any payments on secured property that remain after bankruptcy, making these payments on time gives you an advantage on reestablishing your credit post-bankruptcy. Additionally, if you can qualify for a secured credit card, you can use this to make small purchases and make timely payments on the monthly balance. These activities will allow you to start building your credit almost immediately and will help to show your potential auto loan lender that you have control of your finances after bankruptcy.
People Can Get Loans after Bankruptcy
One of the biggest bankruptcy myths in existence is that you’ll never be able to qualify for a loan after filing for chapter 7 bankruptcy. This just isn’t true. In fact, there is a mountain of evidence to the contrary. If you’re worried about your eligibility for automobile or housing loans, discuss this with your Dallas bankruptcy attorney who can offer stories of how previous clients have been able to obtain financing after filing for bankruptcy.