How to Use Bankruptcy and Get Approved for Car Loans

Bankruptcy and Car Loans

Bankruptcy is a decision that will affect your future credit worthiness, but if you work it right it can be a positive decision. When you look at buying car after declaring bankruptcy claims, you may think that it is impossible to obtain auto financing in Kirkland, Washington. However, there are programs that help those who are bankrupt and secure financing. If you pay off this loan with timely payments, you are building your new credit history and will be more likely to qualify for other loans in the future such as credit cards or even a home loan.

Why People Need Auto Loans and Bankruptcy

The lenders who allow bankruptcy and car loans know that a bankruptcy is a second chance making it much easier to get loan approval. It does not matter what your reason is for filing bankruptcy the lenders who specialize in these programs will only look at your new clean slate. Some of the reasons that people file bankruptcy include:

  • Too much debt
  • Medical bills
  • Divorce
  • Garnishments

When you file bankruptcy, all of these issues dissolve and you are given a second chance. Sometimes, this second chance auto loan is the best thing because you are able to start over without the worry of garnishments or unpaid bills hanging over you.

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What is Bankruptcy?

Bankruptcy is a type of debt elimination where you will either repay your obligations for pennies on the dollar or your debt will be eliminated completely, depending on which chapter you file. While the bankruptcy will show up on your credit report, all of your prior debts will disappear giving you a fresh start. Sometimes, lenders in Kirkland think that it is better to have this fresh start because there are no debtors fighting for your money, making it easier to get financed after bankruptcy than before.

What are the Requirements?

There are few requirements for the basic bad credit car loans after bankruptcy which include a minimal income, age and employment. The most common requirements are that you must be over the age of 18 and have a verifiable source of income. This income can be from virtually any source as long as it is considered long term and not something that will end shortly.

The income amounts will vary depending on the lender although most require at least $1400 per month. The lender tries to keep your payment in your budget so it is important to be completely honest with the lender as to your current income and debts so that you are not back in a position where you may fall behind. The lender is there to help you since they don’t succeed unless you do.

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