Filed Bankruptcy in the past, but want to purchase a new or used car?  This vital information is for you!

So, you had to file bankruptcy. The world is not coming to an end, there really is hope on the horizon!  When suitable, filing bankruptcy gives you a second chance to get it right. Your after bankruptcy credit will most assuredly group you in to the higher interest rate category “Bankruptcy Auto Loans” but keep in mind that high interest rate is perceived much better than “high risk”.

Auto Loan Locator offers choices to the consumer, searching out competitive interest rates on a bad credit car loan. The exact rate, of course, will vary depending on variables such as your credit history, your debt to income ratio, whether your purchase is for a new or used vehicle, and the term of the loan. The longer the term, the higher the interest rate in most cases.


Financial Pointers For Bankruptcy Auto Loans:

  1. Most online financial institutions require a minimum loan amount of $7,500.00, with a maximum of $50,000. When you are requesting a specific amount please make sure you request enough to cover all costs (taxes, title and license fees) If you do not fill in a requested loan amount on the application, and you are approved, it will be for the maximum amount possible based on your debt to income ratio.
  2. All loans terms range from 24 to 72 months. If you are looking for a shorter term than what you are approved for, remember you can pay the loan back sooner because there is never a prepayment penalty.
  3. Our auto loan lenders do not require a down payment when you purchase the car within the perimeter of the loan to value amount, and there are no application fees. You have absolutely NO obligation to use the loan until you sign the check and purchase or refinance your vehicle. By signing the check, you will be accepting the terms and conditions of the loan which are attached to the check.
  4. Your annual percentage rate granted to you when approved will be locked in for 30 days on the day a completed application is submitted so you will have plenty of time to shop around for the perfect vehicle.
  5. Our auto loan lenders calculate the interest charges on your loan using the simple interest method. There are never any penalties associated with paying your loan off early.


Repairing your credit AFTER The Bankruptcy Action

When your credit has reached a point of “beyond repair” and filing for bankruptcy is your only alternative, do not despair. Bankruptcy gives you a new opportunity to get it right the second time around.

Any person who resides in, has property in, or does business in the USA may file for bankruptcy, unless, of course, you have been involved in another bankruptcy case that was dismissed within the last 180 days, or have previously filed for bankruptcy and received a discharge within the last 6 years. Weighing the alternatives, a person who has substantial debts that are not dischargeable (see eligible creditors below) or who has sufficient income to repay most of his debt within a reasonable period or time should not file for Chapter 7 Bankruptcy.

Filing bankruptcy offers an “automatic stay” that stops all eligible creditors from collection actions. A creditor must petition the court to lift the stay in order to proceed with a collection matter or foreclosure action against you. Once your Chapter 7 Bankruptcy is discharged your list of eligible creditors accepted within the structure of the bankruptcy will be forced to cease all further actions against you.

In a Chapter 13 Bankruptcy, however, you work with a court-approved repayment plan to repay your outstanding debts over a certain period of time (generally 3 to 5 years). A structured repayment plan remains on your credit for 7 years after discharge, while a Chapter 7 Bankruptcy remains on your credit for 10 years after the discharge date. It would appear then that you are rewarded for the repayment plan, however, don’t forget to count the years of repayment before discharge, thus your credit could be affected for up to 12 years.

Making the decision to repay your debt through a Chapter 13 Bankruptcy or to dismiss your eligible creditors through a Chapter 7 Bankruptcy filing is a personal one; however, again, always weigh both options carefully. You can begin with a Chapter 13 Bankruptcy and later move to a Chapter 7 Bankruptcy if it is not feasible for you to keep up with your commitment; but by doing so your credit report will show multiple bankruptcies filed, and the consequences of that reporting could affect your getting back on your feet for a longer period of time. Prior to making any decision, if you have not already begun or finished the process of filing you should consider what debts are eligible for discharge and, of course, what assets you hope to hold one to. Talk to a bankruptcy attorney for the best route to take in your personal situation.


Are you in the middle of Chapter 13 Bankruptcy or Debt Counseling?

If you have filed a Chapter 13 bankruptcy, and are more than 60 days from complete fulfillment, we do not have any auto loan lender or dealer recommendations to pass on to you. Institutions today offering auto loans consider a Chapter 13 bankruptcy one step away from a Chapter 7. If you were to obtain a loan while completing a Chapter 13, you could include that debt in your List of Creditors documents should you choose to eventually convert your Chapter 13 over to a Chapter 7. That is a risk a lender is generally NOT willing to take when considering your new or used automobile application.

If you are currently in debt counseling, only by exception and a letter of approval from your counselor can you attempt to be approved for a loan.

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