Fremont Bankruptcy: Getting a Car Loan After BK

It is easier for many of our clients to get a car loan after filing bankruptcy.  The finance company knows that by law, you are not allowed to file another bankruptcy for a few years.  In Chapter 7 bankruptcy, you are not allowed to file another Chapter 7 for 8 years after the previous filing.  Most car loans are for only 6 years max.  Thus, it is probable that you will get many offers to buy a car right after bankruptcy.  If you buy a car now the car dealers’ lending risk will be reduced because the car will be paid in full before you can file for another bankruptcy

However, you may be one of the few that will not get any offers from anyone.  In order for you to get a car loan after bankruptcy, you should repair your credit.  You can start improving your credit by drawing up a budget for all your expenses.  By following your budget, you will not spend more than your income and you will be able to pay all your bills on time.  Second, you should go over your credit report to make sure that everything on it is accurate.  Some credit report companies offer a “Post Discharge Dispute of Consumer Liability Report.”  This is a very helpful tool to make sure your credit report is accurate after bankruptcy.  

The best way to get approved for a car loan is to know how big a loan you can take.  With this number in mind, find and choose a car that conforms to that number.   Get approved for a loan first and then choose for your car.  Make sure to research the dealers and their requirements for approval.  Every dealership will have different requirements.  It may be helpful to first call a few of the lenders and ask about their requirements and how they deal with a prior bankruptcy.  You will be pleasantly surprised at how many dealers are willing to talk and work with you.  Even if the dealer will not work with you, they would be able to refer you to other dealers in the area that will.

Once your credit score improve, getting a car loan approved will be easier.  Until then, you can buy a used car and wait a year before applying for a car loan.  For more information about getting started with your bankruptcy, call a knowledgeable Fremont attorney at Sagaria Law.

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