If you have entered the Louisville bankruptcy process and are in need of a car there are some things to consider about the timing of your new loan and how your bankruptcy will affect getting this loan.
Chapter 7
One of the reasons Chapter 7 bankruptcy is appealing is its quick nature. Usually a person can have their debts discharged in as few as six months. While having debt eliminated in a quick turnaround would be nice, many car loan lenders won’t approve a car loan until after the case is complete at the time of the discharge. Further, some lenders are hesitant to lend to post-Chapter 7 consumers simply because of the nature of their prior financial situation leading to filing the bankruptcy. However, this isn’t to say chances of car loans in or after a Chapter 7 are zero; just that it could take some time before your credit profile allows for the approval of another loan.
Chapter 13
A Chapter 13 bankruptcy is a slow and steady approach to debt relief. Taking up to five years before a debt discharge can throw a wrench in the plan of getting a car loan after the case is complete. However, most lenders are willing to offer car loans to active or post-Chapter 7 consumers, as long as you can provide (1) documentation of the 341 Meeting of Creditors and approval to wipe your debt, and (2) documentation of the Trustee’s approval to incur more debt during the bankruptcy. If you can meet these requirements and sustain a monthly loan payment you might just be on your way to a car loan in bankruptcy.
