Car Loans After Bankruptcy

Vehicle loans are one of the most popular loan types in the country, and for good reason. To make a living, most people require reliable transportation. When people file Chapter 7 bankruptcy, one of the main concerns they have is whether or not they will be able to obtain a car loan afterwards. While you must wait at least until you receive your Chapter 7 discharge, which usually occurs 60 days after your 341 hearing of creditors, you can then begin applying for auto loan.

Loans After Bankruptcy

It is possible to get an auto loan soon after being discharged from Chapter 7 bankruptcy, but you will have a difficult time finding a lender. Expect to pay significantly higher interest rates. Chapter 7 bankruptcy can stay on your credit report for up to ten years after you file it. Additionally, if you had good credit before going bankrupt, your credit score will likely have suffered when you incurred too much and/or delinquent debt. Because of these two factors, you’ll need a lender who is willing to work with “poor or no credit lending” standards. High-risk borrowers are charged higher interest rates by these lenders.

Credit Required

Generally, you do not need perfect credit. The first step toward getting a car loan after bankruptcy is to start rebuilding your credit. If you have any secured property payments left after bankruptcy (such as a car loan or a home loan), making these payments on time will help you rebuild your credit. You can use a secured credit card to make small purchases and pay off your monthly debt on time if you qualify. These activities will allow you to quickly start building credit and show your possible auto loan lender that you have recovered control of your money after a Houston bankruptcy.

If you are experiencing debt problems or have questions about how bankruptcy, contact our Houston bankruptcy lawyer office today.