Getting a Car Loan After Bankruptcy: Car Financing in Indiana

Obtaining a car loan after bankruptcy is achievable, but often requires research and effort. Indy Auto Man makes bankruptcy car financing in Indiana easier. Check the strategies you can use to enhance your likelihood of loan approval at Indianapolis used car dealerships or apply online right now:

Bankruptcy car financing: Chapter 13 vs. Chapter 7

Bankruptcy is a necessary measure for those who find themselves in a difficult financial situation and can no longer pay loans. However, life does not stop after bankruptcy — practice shows that bankrupts can restore their credit history and apply for loans. The two most prevalent types of laws for individuals that help you in gaining a car loan are Chapter 7 and Chapter 13.

• Chapter 7 enables you to eliminate eligible debts and begin anew. Buying a new vehicle is advisable only after your bankruptcy has been finalized, which means you have all the papers at hand. A process that typically takes four to six months. Acquiring a car loan or other assets before this without official court approval could be viewed as fraudulent.
• Under Chapter 13, if you obtain court approval, you may be able to purchase a vehicle during the bankruptcy proceedings. 

How does bankruptcy affect car financing?

Bankruptcy is a legal procedure that allows you to get rid of debts. Although banks are wary of borrowers with a history of bankruptcy, they still trust former bankrupt more than chronic defaulters with open delinquencies or current court collections.

Moreover, if we compare the situation with bankruptcy and delinquencies on loans, the first option is much better for two main reasons:

• Bankruptcy not only gets rid of debts but removes these obligations from the list of active ones in the credit history.
• After procedure completion, it is much easier for the borrower to restore their credit history.

When banks can issue a car loan after bankruptcy

Most banks are willing to consider applications for a car loan from borrowers with a history of bankruptcy. In doing so, they will take into account:

• The period after the procedure completion. On average, most banks prefer that at least a year has passed since the completion of bankruptcy.
• Credit history. If after bankruptcy the borrower was able to take out and successfully repay several small loans, for example, for household appliances. Such a positive credit history significantly increases the chances of approval of a car loan.
• Amount of official income. There must be a regular income and its amount is to meet the bank's requirements to allow servicing a new loan.
• Guarantees and collateral. In some cases, the bank may offer a car loan subject to the provision of collateral or surety.

Confirmed regular income is one of the main factors forming the bank's decision. You can’t do without it even if you weren’t in bankruptcy, but you should remember to improve your credit history as well.

Bankruptcy car financing with Indy Auto Man, Indianapolis

Indy Auto Man helps customers in or out of Chapter 13 bankruptcy obtain the best car financing deal in Indiana. We work with CapitalOne, the bank that can approve borrowers with discharged bankruptcy (out of BK), or CPS, Prestige, GLS. And collaborating with Westlake Bank on applications from people who haven't completed Chapter 13 bankruptcy.

• If you are in Chapter 13, we need a letter from your trustee approving the maximum interest rate and monthly payment.
• If you are out of Chapter 13, the conditions of the loan depend on the bank and whether your credit was reestablished. We had cases where customers had to pay zero dollars towards a down payment.

Paperwork to get a car loan after bankruptcy in Indiana

• Pay stubs confirming income that allows for monthly payments;
• Proof of residence;
• Valid driver's license. 

We can even help customers from other states to get car financing after bankruptcy, contact our financial department for more details.

Getting a car loan after bankruptcy is a tricky but doable task. After all, sometimes bankruptcy is a necessary step towards financial recovery. This procedure takes time and demands patience and effort, but it is much easier to follow with the assistance of knowledgeable specialists.

If you have doubts or questions about bankruptcy car financing in Indiana, the IAM financial experts are ready to help you sort them out. Get a free consultation or approval already today!