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Financial duress can hit the best of us causing us to wonder if a bankruptcy auto loan is even possible. Unfortunately, it puts us on the wrong end of creditors and has a devastating impact on credit reputation. Sometimes the only solution is to file bankruptcy and start over. Of course anyone who’s been through the process knows that’s easier said than done. Bankruptcy doesn’t always make things better. Consumers with a bankruptcy trying to get their hands on a new vehicle know this.

Bankruptcy doesn’t have to be the end of the line. Fortunately, consumers who have filed bankruptcy no longer have to settle for traditional lenders. Valley Auto Loans wants to help people who have filed bankruptcy get the financing they need to get behind the wheel. We’ll help you get your new beginning.

The Open Bankruptcy Auto Loan

An open bankruptcy is a pending case. Once you have filed bankruptcy papers, that case is automatically considered open until a decision has been made by the court. Pending bankruptcies will put a freeze on your potential to get a car loan. Valley Auto Loans can help you find a lender whether you are filing for Chapter 7 or Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 filings remain open anywhere between three and four months. Before any lender will consider your application, you must have a meeting with creditors. This is called a 341 meeting. It gives creditors listed on your bankruptcy papers a chance to ask a few questions about your current debts. No lender is going to consider your car loan application until after this meeting for several reasons.

After the meeting, you will no longer be able to add additional debt to the bankruptcy petition. This way no new loan can be discharged in that bankruptcy process.
If your claim for bankruptcy were dismissed by the court, you would still be obligated to repay the auto loan.
Creditors must comply with the bankruptcy terms. This means your listed debts are null and void, thus lowering your debt to income ratio.

If you are looking for a chapter 7 bankruptcy car loan and have proof of the 341 meeting, you can apply for a pre approved loan.

Chapter 13 Bankruptcy

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Bankruptcy Auto Loans

A Chapter 13 filing gives you a little more flexibility with auto loans. The Chapter 13 process can be prolonged, lasting up to five years. Taking your income into account, the court will establish a payment plan for the interim. You are then responsible for those payments during the bankruptcy process. If you hope to get any type of new financing, you would need the court’s permission to do so.

In the case of a chapter 13 bankruptcy car loan, the court is going to want to know why they should extend the courtesy, essentially growing your current debt. You can argue the case that your current vehicle isn’t reliable and your family needs a car. You can justify needing a second car by explaining how there are multiple people in the home that need to commute to work. You might also explain to the court you need the car but another family member requires means to take the children about and deal with daily chores.

Your argument must be represented through a filing to the court, called a Motion to Incur Additional Debt. After reviewing your filing, the judge is likely to have you in chambers to hear arguments. The judge will likely want to know about the potential loan, its terms, including interest rates, and how you plan to repay it.

If the court does accept the motion, the judge will issue an Authorization to Incur Additional Debt. This can be presented to your lender with a loan application.

Chapter 7 or 13, once you have the proper paperwork in place, you’re pretty much on your way to a dealership and behind the wheel of a new car!

Valley Auto Loans Bankruptcy Car Financing

Getting a decent line of credit is a daunting task even without bankruptcy. If your credit scores aren’t exemplary, lenders consider you a risk. You end up either hit with high rates or rejection. Some consumers wait it out, knowing in time the bankruptcy should no longer (allegedly) affect standing with lenders when applying for a bankruptcy car loan. This wait can last anywhere up to seven years or more.

We are here to show you the best ways to circumvent the normal channels that would keep you from getting a new car. Unlike traditional financiers, our network of lenders don’t believe anyone should be penalized because misfortune put them in a less than tenable financial position. Having a car isn’t a luxury. It’s a necessity, making many aspects of your lifestyle easier to maintain. Valley Auto Loans is composed of financial experts with backgrounds in helping those with bad credit and bankruptcy history.

Don’t Settle for Less with a Bankruptcy Car Loan

Bankruptcy will have an impact on your creditworthiness with lenders. What’s truly regrettable is how we let bankruptcy affect how we see ourselves. Financial institutions are going to see you as a risk when applying for car loans during bankruptcy, because of the bankruptcy, but you shouldn’t see yourself as such. Most people coming off a bankruptcy and looking for financial help tend to approach the situation as I’ll take whatever I can get. If you’re looking to get your hands on a car, that attitude leads to loans with high interest rates and maximized monthly payments regardless if you’re looking at pre or post-bankruptcy auto loans.

Unfortunately, a lot of people with bad credit and bankruptcy are encouraged to get in over their heads if they want a car. A 2009 study by the Center for Responsible Lending revealed almost $26 billion was poured into car payments as a result of inflated bankruptcy auto loan rates. Worse, many of those paying consumers ended up losing the vehicle when they couldn’t maintain the high payments.

Most people who file for bankruptcy do so out of necessity. They are typically honest, hard-working individuals with a good track record for making their bills on time. Despite bankruptcy, you deserve a chance to own a decent car with good financing. Valley Auto Loans has a large network of reputable bad credit and bankruptcy auto loan lenders that are ready to help you. We can help you get a pre approved loan that you can take to a dealership. In fact, with a pre-approved bankruptcy auto loan, you can get a new car the way you’re meant to. With the confidence and assurance that you’ll be treated like anyone else looking for a new car.

A Few Last Notes

Valley Auto Loans would strongly advise that you use bankruptcy auto loans practically. Instead of getting a new car, consider a used vehicle. Today’s pre-owned vehicles are more dependable than ever as even a model a few years old will be technologically advanced. These cars will have a lower price tag, offer lower interest and insurance rates, smaller payments and will likely be easier to maintain with any current budget.

Also, Valley Auto Loans gives you the opportunity to rebuild your creditworthiness through our bankruptcy auto loan program. Your credit score is gauged on a number of things, but loans and credit are critical factors. Repaying your bankruptcy auto loan on time every month is going to show creditors that despite any black marks in your financial history, you are a dependable consumer that pays their bills regularly.

Conclusion

Filing for bankruptcy doesn’t have to be a hindrance to your needs for a good car to maintain or improve your lifestyle. Valley Auto Loans is the resource for finding you the best lender ready to help you get behind the wheel of a car despite Chapter 7 or Chapter 13 we can help you acquire a bankruptcy car loan starting today!