Obtaining a car loan during bankruptcy
Michigan residents who have filed for bankruptcy may be able to get a car loan after doing so. Those who have filed for Chapter 13 bankruptcy could be allowed to take on an auto loan during the course of their repayment period. Most who are seeking a car loan during or after a bankruptcy will work with a subprime lender. Such a lender will take a person’s ability and willingness to pay when deciding whether to extend a loan offer.
Ideally, a loan applicant will show at least $1,500 of monthly income prior to taxes. He or she will also need to have worked for the same employer for six months, and a lender will also ask to see evidence of a contact cell phone number. Personal references will also need to be provided from people who can attest to the fact that a a loan applicant is able to repay the loan.
The reason why a person will work with a subprime lender is because bankruptcy will have a significant impact on a person’s credit score. This is generally true whether an individual files for Chapter 7 or Chapter 13 bankruptcy. A Chapter 7 bankruptcy stays on a person’s credit report for up to a decade while a Chapter 13 bankruptcy stays on a person’s credit report for up to seven years.
By filing for bankruptcy, an individual may be able to obtain long-term debt relief. It may also make it possible to put an end to creditor contact by phone or by mail. Individuals who file for Chapter 13 bankruptcy may be allowed to seek financing for a car or any other items deemed necessary by a trustee and judge.