Child support is something that is considered to be very serious by all lenders serving bad credit borrowers. This applies to both the payers and recipients of child support. All poor credit car shoppers need to know that child support can play a major role in deciding the fate of their car loan application. We, Valley Auto Loans, are well known throughout the United States for our bad credit auto loan service. Over the years, we have helped innumerable bad credit consumers gain control over their problematic financial condition through our guidance.
Being into bad credit auto loans since years, we have come across many customers facing child support related concerns. At the very beginning, any poor credit auto loan applicant must understand that all high risk auto lenders have a serious problem relating to child support income. This is because of the fact that it is not possible to garnish this type of income. Let us make it simpler for all the readers. This essentially means that, in these cases, it is not possible for the lenders to obtain a court order for payment of the remaining balance if the car is repossessed. Therefore, lenders are extremely careful while dealing with customers who either receive or pay child support. However, under two specific circumstances, lenders often approve loan applications from such borrowers.
The first of the conditions is that the borrower must have an additional source of earning from a job or other sources that they can garnish. The approval chances are more for applicants with a longer job tenure and higher income. The second condition applies when the borrower has an excellent residential stability, and the poor credit is situational rather than habitual. Legal documentation of child support income is a requirement for these consumers. This means that applicants must furnish a copy of the court order that mentions the amount and payment length.
Credit challenged people paying child support find it particularly difficult to qualify for an auto loan, in case they are behind their payment schedule. The reason is that these people have a tendency to leave jobs frequently. The court starts garnishing of their paychecks to cover previous payments when they are found working in a certain organization. As a result, they quit their present job for a new one just to avoid garnishment of their salary.
Delinquency in terms of child support payment is also reflected in the credit reports. Naturally, these applicants are rejected as per the policy of the lenders. However, lenders may decide to consider these cases if there are written documentation that proves that the applicant has made arrangements with the child services.