Bankruptcy laws were enacted to provide way out for people when their financial situation has gotten out of hand. The main aim of Bankruptcy is to help you clear your debt and give you the opportunity to begin afresh and become better at managing your finances.
One great way to get back on track after a bankruptcy is getting a used car loan, only ensure that you turn in your payments on time. Giving some time won’t improve your credit but getting a credit coupled with good debt management will help you get your credit revived.
One form of Bankruptcy is the type where your debt is wiped out completely and you get cleared. This usually requires a few months from the beginning to the end. It is also advisable not to get a used Car loan when you are about to declare bankruptcy because your credit score based on your debt to income ratio will be very low, and this may deny you approval for loan. The best will be to file and have your 341 hearing before a Judge before applying.
The Second type of Bankruptcy lasts for several years as long as you stay faithful to your payment plans. In addition, before you apply for a needed car loan you will be required to contact your attorney or bankruptcy trustee to give you a signed document to incur debt and the maximum number of monthly payment you are permitted to take.
Financial requirements for Bankruptcy after Used car loans
These include your income, usually not less than $1,500 through steady job or retirement and Child support if verified can also be useful. The Lender will also ensure you have not gotten a new car in the last 12months. Also, a down payment may or may not be required from you, so it is good you some amount ahead as it might get you a better deal as well.
Finally, it is very important to be real with yourself and what you can afford when getting a bankruptcy car loan and also try best to avoid errors that lead to bankruptcy in the first instance.