Will I qualify for a Bankruptcy Car Loan?
You are eligible for a bankruptcy car loan if you were faced with bankruptcy, filed for one and you need to finance a car, whether new or used. This criterion allows you the opportunity to approach a lender who can offer you this type of loan. A bankruptcy car loan is specifically one that is provided to individuals who have filed for bankruptcy. It is focused towards and caters to those specific individuals. Specialized lenders are readily available either online or through walk in institutions to help you with your after-bankruptcy or in-bankruptcy car loan applications. They are there to ensure that everything is done to allow for you to be approved for this type of loan.
Many different reasons are given for filing for bankruptcy; with debt management being the most important one. However you should recognize the disadvantages of filing for a bankruptcy before doing so. Basically a bankruptcy should be a last resort and filed only when all other options are exhausted.
When having to file for a bankruptcy, there are two different kinds; chapter 7 and chapter 13. A chapter 7 bankruptcy is categorized as liquidation. This type of bankruptcy involves your non exempt assets being sold and the money that is generated is then given to creditors to pay off your debts. The second category bankruptcy is the chapter 13 which is classified as a restructuring bankruptcy. This involves developing a repayment plan with which you can repay your creditors within a pre-determined time frame, usually 3 to 5 years. In this instance, properties are not sold. It is up to the courts to decide what the repayment plan should be.
Credit cards, bank loans, unsecured debts and leases are known as dischargeable debts. Non dischargeable debts include child support, student loans, legal debts and other debts such as divorce settlements. Another reason why bankruptcy should be considered a last resort is that it can remain on your record for up to 11 years.
But all is not lost. Bad credit can be re-established by getting a bankruptcy auto loan. And the advantage to the person applying is that lenders and dealers have made it much easier to apply for and be approved for a bad credit or bankruptcy car loan. The reason for this is that these companies realize the importance of having a vehicle, whether it is needed to go to work, school etc. The companies who offer these types of loans are specialized lenders and they are there to help those who find it hard to secure an auto loan due to a bad credit history.
This type of auto loan financing can help you reverse your bad credit to good credit s you make your payments. One of the disadvantages of bankruptcies is that when applying for a bad credit car loan, you will have to pay a higher interest rate compared to someone who has a good credit rating. The one thing to remember when being approved for an after bankruptcy car loan is that it is in essence a second chance. Therefore you should be very careful to make your monthly payments and ensure that you do not lapse on your payments.
Reversing your credit from bad to credit can definitely have its advantages and work in your favor. It can help you reduce your payments in some instances by hundreds or thousands of dollars over the course of your loan.
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The article was produced by the writer of BankruptcyCarLoan.ca. Chris George has over 15 years of a vast experience in providing Automotive Special Finance services. For more information and articles about Bankruptcy Car Loans, please visit our website at BankruptcyCarLoan.ca.