While it may seem counterproductive to go out and buy a car after you’ve just made your way through bankruptcy, we’ll let you in on a little secret: it can actually dramatically improve your life even if it did destroy your credit. Of course, you have to be smart about the whole thing to really pull it off and maximize the benefits, so before you start sprinting to your nearest local car dealership it’s best you head the following information so you can make sure you don’t fall victim to the same downward spiral that led to your bankruptcy in the first place.
What Kind Of Bankruptcy You Filed Matters
Chapter 7 bankruptcy, also known as “straight bankruptcy,” is what most people think of when they hear the term. It’s by far the most common method of bankruptcy for most filers considering how quickly one can finalize the process and get away with a clean slate with minimal drawbacks. It involves liquidating assets and property to essentially pay off the debts owed, and dismisses most other outstanding debts beyond that threshold. While a chapter 7 bankruptcy will stay on your credit report for as many as 10 years, it’s still considered a great deal compared to the alternative struggles faced by those filing. If you’re still in the process of filing, however, this can mean purchasing a vehicle, even if you desperately need one, can get tricky. After all the last thing you want is to be forced to sell the vehicle you just got to cover your debts. So really it’s best to just wait.
Chapter 13 bankruptcy is much different. It depends on income and involves paying off a significant portion of your debt within a three-to-five year time frame based on a strict payment schedule that is agreed upon in court. The fun side of this type of bankruptcy is that it allows people to protect and retain most/all of their assets. After the time frame is up, all other outstanding debts can even be forgiven. However, because repayment plans are so strict, and the debtor is able to maintain possession of their vehicle, a person actively paying back their debts with a chapter 13 bankruptcy must obtain permission from a judge in order to purchase a vehicle of any kind. This means, if you need a vehicle, it can be extremely difficult to get one even years after you initially file. Once your payment period is up though, you’re good to go!
How Long Do You Have To Wait
Once your bankruptcy case is closed, your debts are paid or forgiven, and you’re ready to take that next step into your future, there’s no rule saying you have to wait. In fact, since your credit is already as low as it’s likely ever been, and hopefully ever going to be, getting a used car and making responsible payments can actually help you start to build your credit back up pretty quickly. Just make sure you don’t get yourself back into old habits – you’ll only improve your credit if you’re making an effort. Also, you’ll want to avoid predatory lenders on the prowl who are actively looking for people fresh off the bankruptcy battlefield!
So, Whom Do You Trust?
Of course, we will always welcome you here at Suburban Auto Finance. We have clients of every sort, including those with bad credit, no credit, and who have recently gone through bankruptcy. We’re not about trying to persuade you we’re the greatest, or that you’ll only ever qualify for less than what you deserve. Instead, we offer Guaranteed Credit Approval and incredible financing to all, no matter the hardships. Better still, we’ll even make sure you end up at the car dealership that’s right for you, with financial preapproval that cannot be denied!
If you are looking for the best in auto financing, no matter what your current credit situation is, choose Suburban Auto Finance and learn how we can help you get back behind the wheel in no time. At Suburban Auto Finance, we understand everyone deserves the independence of having a reliable vehicle, and our mission is to work as hard as we can to make that happens for you.