Auto Financing After A Bankruptcy
One of the best ways to recover from bad credit after filing bankruptcy is to get a car loan and make the payments on time. A paid-as-agreed auto loan after bankruptcy will raise your low credit score and get you back into the credit world. If you are currently in the middle of a bankruptcy or recently discharged, it doesn't mean you can't get auto financing. If you meet the minimum requirements, don't wait any longer. Waiting will not help you rebuild your credit. Many dealers out there say they can help someone with bankruptcy, however, do not have the inventory or the lenders that will give you the best financing terms available. This could land you with huge interest rates, big monthly payments and especially a car you might not like. Don't get stuck with a bad auto loan. Let the professionals at cleanstartauto.com help you get the best financing possible. We work with over 25 specialized after bankruptcy lenders across the U.S., that are eager to earn your business and help you get back into the credit world.
To qualify for a bankruptcy financing program, applicants should meet the following basic approval requirements.
- Be currently employed. (Retirement, SSA-SSI, child support and self employed is ok with verification of income).
- Minimum gross monthly income of $1,500.
- Money down may be required.
- No repo in the last year unless part of a bankruptcy.
Type Of Bankruptcies
There are two types of personal bankruptcies: Chapter 7 and Chapter 13. A few years ago it was more common for people with bad credit to file a chapter 7 (total liquidation). With a chapter 7, all your debts are wiped clean and the process takes only a few months.
Since the new bankruptcy laws went into effect, fewer and fewer and fewer people are allowed to file chapter 7. More and more people are now filing chapter 13., which is a repayment plan that lasts between three and five years.
Get Approval from your Trustee For Open 13's
To get an auto loan in an open chapter 13 bankruptcy, you will have to do some work. There is no such thing as an instant approval or apply today Drive Today Auto Lending if you are in an open chapter 13. First you should check with your trustee or attorney and let them know that you want to buy and finance a car.
Every lender that approves people in open bankruptcies requires an Authorization to Incur Debt. This is a legal document obtained from the bankruptcy trustee. It states what your maximum allowable payment is and that the new loan will not be part of the open bankruptcy.
As long as the new car you plan on purchasing is within your budget, most trustees have no problem approving your request. We recommend that you obtain this document from the courts prior to shopping for your new car.