Applying for a car loan after bankruptcy
People in Florida who have filed for bankruptcy might wonder if they can get an auto loan. While it is still possible to get a loan after a bankruptcy filing, it may be more difficult, and how the loan is applied for depends on the type of bankruptcy.
A Chapter 7 filing is the quickest, and much unsecured debt is discahrged. It takes only a few months, but a person is unlikely to be approved for an auto loan in that time because the lender runs the risk that the loan will be incouded and then discharged. However, once the bankruptcy is completed, it might be possible. A Chapter 7 bankruptcy remains on a person’s record for 10 years, but a person can begin applying for new credit as soon as the bankruptcy is discharged.
For a Chapter 13 bankruptcy, the process is much longer. It takes several years because a person commits to a repayment plan. However, with documentation about the bankruptcy and the approval of the trustee, a person can apply for a car loan. Both Chapter 7 and Chapter 13 filers may face some doubt from dealers due to their bankruptcy. They might be turned down by some, but other places may offer a person assistance.
The idea that bankruptcy means that a filer can never get another loan is one of the many misconceptions about the process that exists. In fact, if a person has fallen far behind on payments and cannot keep up, filing for bankruptcy is a step toward repairing that credit and a fresh financial start. However, it is not an ideal solution for everyone, and an lawyer can describe the eligibility requirements while exploring other form of debt relief that may be available.