There are several different types of bankruptcy in the United States. The two most common types of bankruptcy for an individual are called Chapter 7 bankruptcy and Chapter 13 bankruptcy. If you file Chapter 7 bankruptcy, your assets will be sold to pay off creditors and anything that did not get paid off will be forgiven. Some items – like student loans – will still stick around even after a Chapter 7 bankruptcy. Chapter 13 bankruptcy involves a process of reorganizing your debt and putting you on a payment plan to pay it back over time.
These two types of bankruptcy have a lot of differences but there is one thing all personal bankruptcies have in common – they ruin your credit for years. If your credit score is damaged because of a bankruptcy in your past, it can seem impossible to get access to the basics of life such as a reliable car. If you are looking for a car loan after bankruptcy, there are some buy here pay here dealerships that can help.
How to Qualify For a Car Loan After Bankruptcy
If you have a damaged credit score due to bankruptcy, traditional banks and financing institutions are not going to consider you for a loan. Financing decisions at banks are based heavily on your credit score. In order to get financing after bankruptcy, you need to seek out buy here pay here car lots that offer in-house financing. You can get financing for used cars 500 down at a buy here pay here car lot, even if your credit is damaged from a bankruptcy. If you can show proof of income, proof of residence, have a valid driver’s license and can provide references then you have everything you need to qualify for a car loan.
How Getting a Car Loan Can be Beneficial After a Bankruptcy
Your credit score is used to make decisions in a number of different scenarios. The amount of financing you can get, your interest rates, and even the amount of money you pay for car insurance can all be impacted by your credit score. It is important to try and build your credit back up as you recover from bankruptcy. Getting a car loan from a buy here pay here in Phoenix, Arizona is one way you can start rebuilding your credit. Showing that you can borrow money and pay it back on time is one of the most effective ways to build your credit back up. Even small loans like those available for 500 down used cars will give you the opportunity to start building your credit.
It will take time to rebuild your credit after you go through bankruptcy. Taking on an auto loan that you can manage and pay back on time can be a big step in the right direction when it comes to getting back on track. The team at Auto Action regularly works with people who have a bankruptcy in the past. Find the car you want and get the financing you need with the help of Auto Action.