Buying a car after declaring bankruptcy can sometimes be a necessity. Especially if you had a bad bankruptcy settlement and ended up losing your essential or basic assets like a car or a house, you might feel the need to buy a car after bankruptcy. Traveling for job purposes often makes a car a necessity as it adds to the convenience and saves costs on fuel as well.
How long you may have to wait to buy a car?
The possibility of relying on a car loan to buy a car is most likely after you have declared bankruptcy. The chances of getting a car loan might be very bleak, at least for 6 months after bankruptcy if the bankruptcy was settled by Chapter 7. The overall process of bankruptcy might prolong for over a year, especially if you have not consulted with consultants from https://www.recoverylawgroup.com/bankruptcy/.
If the bankruptcy was settled under Chapter 13, you would most likely have preserved your car if you had owned it before. If not, it leaves almost no chances for an additional debt for the chance maybe 10 years maybe, depending on specifics. In case there are certain circumstances that probably increase or support the re-structured payments plan, the applicant might seek permission from the court for the additional car loan debt. Until the bankruptcy court allows for the same, no additional debt can be taken by the applicant.
What are the options for buying a car?
Buying a car immediately after any form of bankruptcy is not advisable. Firstly, not many lenders might offer credit or car loans to the borrower as the credit score and income levels might not allow for smooth repayment. Secondly, the offers for car loans might be from lenders that charge a significantly higher interest rate, which will additionally add a debt burden on the borrower. Since the car is a depreciating asset and in these initial stages you will have to settle for a car that is dirt cheap and has no features or as you would look in the car, it is best suggested to avoid creating new debts for as long as possible.
Some tips for financing your car loan
- Swap leasing is a very good alternative in such situations. This might not have the best legal arrangement, but if coordinated well with the bank and the car owner, the stressed debt can be swapped for favorable terms. Such scenarios might be difficult to find and there might be some documentation issues as well. But it’s worth looking out for such opportunities, especially within 6 months of completing the bankruptcy formalities.
- Availing credit from a bank or financial institution you have had the longest history of commitment. Since they are aware of the transactions and have been associated with you for a long time, chances of fair interest and approval stand higher.
- Another aspect of lending is tenure. A small EMI feels very right and easy to manage. However, considering the interest rate and the overall impact on credit score, it is best advised to keep the loan tenure short to about 5 years if possible.
If you settled in Los Angeles, Dallas, TX? Then you must instantly dial 888-297-6203 to know more tips and tricks to buy your car after bankruptcy?