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- Puts You in Control of the Buying Process
An open bankruptcy simply means that your bankruptcy has not yet been discharged and you are still going through the bankruptcy process. Chapter 7 and Chapter 13 bankruptcy are the most common forms of bankruptcy. You can indeed get a car loan offer after bankruptcy filing, but in most cases, it may be more difficult. However, one important difference between the Chapter 7 type of bankruptcy and Chapter 13 type of bankruptcy as it relates to getting a car loan is that you may find that an older filing of a Chapter 7 may make it more challenging to obtain financing.
No matter who would be giving you the car loan, dealerships may hesitate to give someone with an open bankruptcy a car loan, but lenders might consider your car loan application after your 341 meeting. A 341 meeting is a part of Chapter 7 bankruptcy, where you, your bankruptcy attorney, and the bankruptcy trustee meet to make sure all your bankruptcy paperwork is in order. 341 meetings are also held to ensure you are not trying to commit bankruptcy fraud and to confirm your personal assets that can be sold to pay back your creditors.
Courts appoint a "Trustee" to manage each BK case. In a BK 13, the Trustee collects funds each month and distributes those funds to your creditors. Trustees also have the authority to approve (or decline) your request to incur the additional debt of an auto loan. You need to request a "motion to incur debt" (or similar wording) from either your attorney or your Trustee. And, this motion needs to be approved by your Trustee. Typically, Trustees will allow you to incur debt for an automobile as long as the loan amount is reasonable and the payment fits within your overall budget.
Some dealerships do have programs for you to start rebuilding your bad credit score via a car loan. If you get a car loan while you have an open bankruptcy, it is likely that the car loan will be expensive and will include interest rates that are higher than usual.
You should know that the terms of a car loan for you if you have an open bankruptcy may likely not be the most favorable. Despite this, competition between Internet lenders has improved the usual loan terms. You now can find it easier to apply for a car loan with an open bankruptcy, and your auto loan payments won't be as high thanks to this competition.
You can certainly find lending networks that are willing to offer you multiple loan options even if you have an open bankruptcy. If your bankruptcy will be discharged soon, you could go ahead and wait it out. But if you're in need of a car sooner rather than later, New Roads Auto Loans can get you approved and connected to the right dealerships. As far as Chapter 13 bankruptcy goes, it is possible for you to get a car loan during this time as well, especially since Chapter 13 bankruptcies typically take longer to complete.
Chapter 13
If you are going through a Chapter 13 bankruptcy, some might recommend obtaining a car loan from a Buy Here, Pay Here car dealer. This means that the car dealer itself underwrites and offers you the credit. You should also know that this means that your car loan is not limited to the underwriting requirements that would be the case if a third-party auto lender gave you the car loan.
One more fact that is important to mention is that Buy Here, Pay Here loans (also called in-house financing), is not offered by all car dealerships. You should know that lenders will take criteria like your employment and credit history into consideration when looking at your car loan application.
To get a car loan via in-house financing while in chapter 13 bankruptcy, you first must obtain a buyer's order from a car dealership that offers in-house financing to people with open bankruptcies. This buyer's order has to include the highest possible interest rate as well as the language "or similar" next to whichever vehicle you chose. This is necessary just in case the loan fails to match the buyer's order.
You will then have to take the buyer's order to the bankruptcy trustee appointed to you by the court and include the reasons why you need a car in the first place. In the event that your trustee agrees, your trustee will file a "Motion to Incur Additional Debt" with the court handling your Chapter 13 bankruptcy. Your trustee will ensure that a proposed repayment plan that is adjusted to take your car loan into consideration is included with this motion. Your creditors and anyone else involved in your repayment plan get a copy of the motion and are allowed to object to the motion before the court.
You may have to attend a meeting to justify the car loan. If the court does approve your trustee's motion to incur additional debt, then the court will issue the order. At that point, your monthly payment will be amended to factor in the car loan. You can then take that order to incur additional debt to the car dealership that offered you the car loan and finish up your purchase of the vehicle.
Chapter 7
Now, if you are trying to get a car loan while in Chapter 7 bankruptcy, you can simply apply for a car loan with a dealer that will accept that type of bankruptcy on your credit report. If you still have a car, you can get a trade-in offer from the car dealer as long as you have positive equity in it. You might want to ask the car dealer to value your trade-in vehicle before you tell them you're looking for another car.
However, you may have the option of surrendering your vehicle to your lender if you have negative equity in it or simply do not want to trade it in. The car dealer might be able to help you with the process of surrendering your vehicle to your lender if you ask.
New Roads Auto Loans finances consumers that have had a bankruptcy. We will finance an open or discharged chapter 7 bankruptcy and a chapter 13 bankruptcy with trustee approval.
New Roads Auto Loans finances consumers that have had a bankruptcy. We will finance an open or discharged chapter 7 bankruptcy and a chapter 13 bankruptcy with trustee approval. Through our parent company, we have been providing auto financing to consumers with a bankruptcy since 1991.
Getting approved for vehicle financing with a bankruptcy at a dealership can be a hassle. Using NewRoadsAutoLoans to get your financing in place before you shop for a vehicle takes the uncertainty out of getting a vehicle.
Our staff of professionals knows how to finance consumers with a bankruptcy and we'll be with you when you shop for a vehicle. We'll support you though out the financing and vehicle purchase process-it's good to have our Loan Agents on your side!
New Roads Auto Loans will work with you to find the right payment amount for your budget. And NewRoadsAutoLoans makes loans to consumers with bad credit-yes even bankruptcy customers with ZERO down payment. That's right, you keep cash in your pocket AND get a new vehicle to drive.
Getting financed for an auto loan with a bankruptcy can be a challenge, let NewRoadsAutoLoans show you the way. Check out our reviews-we've helped people just like you get a vehicle.
And remember, NewRoadsAutoLoans is backed by Consumer Portfolio Services, Inc., (CPS).
CPS has been in business since 1991. We have financed over 800,000 vehicles for consumers with credit problems-including bankruptcy. It's important that you choose a company this is secure, trustworthy, treats you right and protects your personal information. New Roads Auto Loans is that company.
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