The type of bankruptcy protection that you filed for or will file for will make a big difference in the speed with which you will be able to rebuild your credit file and qualify for loans even car loans. Car loans for bankruptcy are not as small and easy to be approved as they appear to be under normal circumstances.
What type of bankruptcy is available?
Prior to applying for car loans for bankruptcy or let us say any kind of bankruptcy auto loans, it is very much important to know what kind of bankruptcy are you dealing with and what could be the consequences of each one. Every bankruptcy is sole in its own way; however most bankruptcies fall under two broad types – Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Under a Chapter 7 bankruptcy incident, the property and assets of the debtor are sold and the profits of your possessions are divided among the creditors or lenders that you chose to include in your bankruptcy. Once your creditors have got their split of the income from the possessions that are sold during Chapter 7 bankruptcy, your creditors can no longer collect on the debt that you owe them. This debt is said to be the discharged debt. There is also other kind of bankruptcy that is likely to be involved in the bankruptcy auto loans.
The chapter 13 bankruptcy allows a borrower to restructure their debts by working with a trustee who forms a payment plan that is paid over a period of five years. Your qualifying for a bankruptcy auto loan will be strongly dictated by which chapter of bankruptcy that you filed. Those who have filed Chapter 7 bankruptcies would face o hindrances in qualifying for this type of loan; on the contrary, those who have filed for Chapter 13 bankruptcies, will have to meet with their trustee and be approved to take out a car loan for bankruptcy according to the budget and the repayment plan that has been set up through the court for their debts.
Bankruptcy car loan – Get the car despite bankruptcy
If you have had your debts discharged under the Chapter 7 bankruptcy, you are well eligible to apply for and be approved for a bankruptcy car loan. You have a new appeal to certain lenders because you are now debt-free, regardless of how you got there. Lenders are well aware of the fact that you cannot file another bankruptcy proceeding for a specific number of years, and this makes them more willing to trust that you will honor the terms of your bankruptcy car loan.
So just go and shop around, find the right car loans for bankruptcy, find the right dealers and car loan lenders like http://www.CarLoanz.net, study the plan and make sure put forth your credit history clearly, without any ambiguity. Basically, what you need to do is put forth your past payments and credit scores and a document exhibiting the reasons for you are applying for bankruptcy. When you find the right price down, negotiate till you get the best price from the bankruptcy auto loan lender. Keep in mind that it is never difficult to get a car loan after bankruptcy. All you need to be is a little wise and patient and shrewd in your dealings.
Before and after hiring a bankruptcy attorney, there are several mistakes that many people make and that you should make a concerted effort to avoid. By doing so, you can save yourself a lot of time, effort, and money. There is a right way and a wrong way to go about doing something, and with the help of a qualified lawyer, you can usually find the right way. For that reason, the first mistake you should avoid is trying to file yourself. Spend the extra money and hire a good lawyer. They can help you save a lot of aggravation in the meantime.
Secondly, make sure you really want to go through with this. Hiring a bankruptcy attorney and filing for Chapter 7 or 13 is a big undertaking and it can have fairly consequential effects on your credit for a long time to come. It could prevent you from purchasing some of the things you want to buy in the foreseeable future. Not only that, it could have an impact on the type of employers who are willing to hire you. Some employers see filing as a symbol of unreliability. Still, it is sometimes necessary. If you need to go through with it, then take advantage of the legal escape hatch our laws provide and don’t spend the rest of your life trying to climb uphill in the snow.
Don’t wait until things are too far gone before you hire a bankruptcy attorney and set the wheels in motion. If you know this is where your life is headed, then go ahead, make the tough call, and get out from under that crushing debt. If possible, do it before the bank forecloses on your house (if that is a danger you’re facing). Certain forms of filing will allow you to keep the home and get on a special repayment plan that works for you in your financial situation. If you wait until the foreclosure is already in progress, this may no longer be an option.
Finally, don’t lie to your lawyer or try to get away with something while going through the process. The people in the legal system have seen it all and they won’t be fooled. You risk jail time and exorbitant fines if you try to cheat the system. This is your chance for a new beginning, so don’t mess it up trying to pull a fast one on the government.
If your financial life has taken a blow recently and you think that bankruptcy is the only option available, think again. Thousands of people have become victims of bankruptcy after the recent global meltdown, however that should not give you any reason not to fight back your shabby financial condition. You can avoid bankruptcy by just following some simple steps, read on to know how you can go about it.
1) Live within your budget: The formula for this simple; if you can’t afford something with what is there in your wallet you better do not buy it at all. Living within your affordability will help you to avoid debt. Focus on your needs rather than wants and purchase only what you really require. Then you will surely be surprised at the amount you save up.
2) Understand the difference between an asset and a liability: This is very important to help you make informed financial decisions. For example, many people take a car to be an asset when in reality it is a liability. The car will begin to lose its worth from the moment you start using it.
3) Money backed by collateral: If you are borrowing money that is backed by collateral, be sure that you have a long term and a short term strategy in place to clear your debt repayments. If you are not careful here, you can end up incurring a huge debt.
4) Save up enough cash to cover your basic needs: Yes, build up an emergency fund. A fund like this can bail you out of a major financial crisis. You do not want to borrow money from somebody when you are already in need of it badly, in such situations an emergency fund can be the best solution.
5) How about working more? : If you really want to save more money, you can find a second or a third job. If you are married, you can ask your partner to do some part-time work from home. The means are endless, you just need to be creative and come up with new ideas so that you can paint a better financial picture of yourself.
Keep these points in mind and you will do good to prepare a solid financial foundation for yourself. What’s more, it will also help you develop discipline in your financial life and help you avoid bankruptcy!