Bankruptcy can provide an opportunity for people struggling with a difficult financial situation to get a fresh start. Clients often wonder if they can qualify for a car loan following bankruptcy in order to get back and forth to work or to get their kids to school.
How Will Bankruptcy Impact My Ability to Get Credit
Often times bankruptcy is seen as a responsible step to getting your finances in order, but, of course, there is a period of time where you will have to reestablish your credit worthiness following bankruptcy. After you discharge a Chapter 7 bankruptcy, you may be able to qualify for an auto loan, however the terms of your loan may be less favorable initially.
Subprime lenders will focus on your credit history when considering whether or not to make a loan and will be more open to situational bad credit as opposed to habitual bad credit. Your payment history on previous car loans and how you handled your auto loan during the bankruptcy may factor into the decision to approve a loan.
If you are eligible, the lender may require a down payment in order to finance an automobile after a bankruptcy. They will likely offer a higher interest rate reflective of your credit score. It is a good idea to shop around for the best rate before you act.
Rebuilding Credit Following Bankruptcy
Choosing an affordable automobile along with the down payment will keep your monthly obligations more manageable. Making timely payments will help you to rebuild your credit so that you can, again, take advantage of more favorable interest rates in the future for the purchase of an automobile or a home.
More and more consumers rely on credit to make ends meet, eventually coming to a point where they have difficulty making the necessary monthly payments. Others may experience a catastrophic event such as a medical emergency, job loss or divorce that leaves them reeling financially. Whatever the cause of your financial predicament, you may want to consider bankruptcy protection as a strategy. Contact the Illinois Bankruptcy Law Offices of Charles E. Covey for a free consultation in order to get the information you need to decide if bankruptcy is a feasible option for you and your family.