Bankruptcy and Car Loans

When you are looking at filing for bankruptcy you will have to worry about how this will affect all of your assets. If you have a loan out on your home or vehicle you should take the time to speak to your lender about what will happen to that asset before you make the move to file for bankruptcy. Having all the information in hand before you make any sort of financial decision will give you the time to decide how best to handle your debts in order to keep yourself afloat through this difficult financial time.

Keeping Your Car

If you are worried about whether or not you will be able to afford or earn a loan for a car after you have filed for bankruptcy you may wish to arrange your financial agreement so you can keep the car you have instead of selling your used car or having it seized. In order to do this you will need to reaffirm your car loan, which basically means you agree with your bank or lender that if you do not continue to make your regular payments after you file for bankruptcy they can seize your car. This is helpful because it allows you to keep transportation to work and allows you to rebuild your credit history.

You may need to reduce the value of your car loan in order to keep the vehicle through bankruptcy. If this is the case, then talk this over with your lender and discuss what you anticipate being able to afford after all your other financial obligations have been taken care of. You will have a certain amount of days before filing for bankruptcy to work out this agreement, usually 910, before you lose this option so you will need to act quickly.

Getting Another Car

After you have filed for bankruptcy you may be worried about how you are going to get financing for another car with your damaged credit history. The first step in working toward this goal is being honest with yourself about what you can afford and what will be offered to you. You probably will not be able to buy a new car, so you will need to look into reliable ways to buy a used car that is dependable and safe. You do not want to settle for an inexpensive car that will not last since you will just have to turn around and purchase another one sooner than you would like.

Since your credit history will have something of a dark mark on it, you will need to speak to dealers and prove to them that you are able to take on the responsibility of a loan. Show them your financial records that prove you have been diligent about making payments on your bankruptcy agreement and have not been adding up credit card debt throughout this time period. Understand that lenders may expect to see at least six months of good financial behavior before they are willing to trust you with a loan.

When looking at how bankruptcy and car loans will affect your financial standing, understand that both will take a while to pay off so you can move on to other financial goals. If you have recently filed, then it may take a few calls to different dealerships and perhaps a few meetings in person before you find someone who is willing to work with you on a car loan. Be diligent, and be honest an soon you will find someone who is willing to give you a chance and finance you.

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