When filing for bankruptcy, the implications can seem pretty far-reaching. Your credit takes a hit and loans may seem like a distant concept that may seem impossible. However, this isn’t totally the truth. In fact, there are still many options for those who have filed for bankruptcy to still obtain loans. These may be for cars or otherwise. Certain lenders and dealerships make it relatively simple for those in bankruptcy (priority to those who have settled it) to get auto loans for a new or used car. Here’s how you can still obtain a car loan even after filing for bankruptcy.
The two types of bankruptcy.
There are two types of bankruptcy, and one certainly makes it easier to get a car loan with. However, that’s not to say that lenders won’t work with both!
Chapter 7 – this type of bankruptcy discharges all debt held by the person applying. This type of bankruptcy makes it easier to obtain a car loan because lenders will see that all other debt has been wiped out, thus freeing up the person to have an easier time making payments on the new loan.
Chapter 13 – this type consolidates all debt and puts the person on a payment plan. While this is still a beneficial type of bankruptcy, lenders are a bit more hesitant to lend. This is because a person has other payments they are making, thus possibly making it harder to pay the car loan.
Buy here pay here car loan.
For both types of bankruptcies and especially for Chapter 13, buy here pay here car loans from car dealers is probably the best bet. With this type of car loan, the auto dealer underwrites and extends the credit and is not limited to the underwriting criteria of an independent, third-party auto lender. This type of payment plan is also called in-house financing. This way, the car loan is between the dealer and the customer, without the interference of a third-party. This is especially good for those in bankruptcy. Typically, a third-party would be the most likely to deny the loan request.
How we can help.
At Blue Sky Auto Finance, we maintain partnerships with direct lenders that offer generous auto loans for people who have filed for both Chapter 7 and Chapter 13 bankruptcy. In addition, we work with a network of auto dealers throughout the United States that facilitate these sales. It’s important to note, however, that different lenders require different criteria for their auto loans. This may include criteria such as length of employment and monthly gross income. Though this could be a plus for those who have steady jobs after bankruptcy!
If you’re currently in a Chapter 13 bankruptcy, in-house dealer financing may be your best option. At Blue Sky Auto Finance, we have a buy here pay here program for auto dealers. Apply now to see if you qualify!