Even if you have recently found yourself in bankruptcy court because of past financial issues, this does not mean that you cannot purchase a vehicle. There are several ways to get auto loans after bankruptcy. Lenders approve auto loans frequently to individuals who have filed for bankruptcy. However, its important for consumers to know that the interest rate on this type of loan can be extremely high.
The best way to purchase a vehicle after bankruptcy is to comparison shop like you normally would do. You may be tempted to agree to any auto loans after bankruptcy. But, it is best to not take the first offer you are given. Previous studies have concluded that consumers who pay higher interest rates are more likely to default on their auto loans. This leads to the banks repossessing the vehicles.
Stay Positive When Searching for Auto Loans after Bankruptcy
Just because you have a bankruptcy on your credit report it does not mean that your situation is dire. If you previously made loan payments on time and/or your bankruptcy was due to a situation beyond your control, you may be able to finance a vehicle through a lender such as a credit union.
Credit unions are different from large banks in that many are community based. This means that the credit union may be more lenient with your situation if the local economy has been struggling.
Bankruptcy was previously seen as a consequence to poor financial management. However, hardships such as divorce, death and medical bills can also cause a bankruptcy declaration. The national and international economy tanked during the Great Recession, and many people became underemployed or unemployed for a year or longer.
Do Not Expect To Ride In Luxury
When applying for auto loans after filing for bankruptcy, it is important to stay realistic. Your court approved trustee may agree to an auto loan, but chances are the trustee will not sign off on a loan for a luxury vehicle. You will probably be able to get a used vehicle priced at $20,000 or below.
If you have filed for bankruptcy some time ago, and you are in the process of getting your finances back in order, you have a better chance at getting an auto loan for a lower interest rate.
So, yes it is possible to get approved for auto loans after bankruptcy. Speak with an experienced bankruptcy attorney to discuss your options.
If you need an experienced and knowledgeable bankruptcy attorney in the North Georgia area, contact us to schedule a free consultation.