Filing for Bankruptcy in Texas doesn’t have to make buying a new car an impossible dream. Even if you have filed for bankruptcy, a new ride is not beyond your reach.
If you’re looking for a car, begin as you would if you had not filed for bankruptcy. Start by shopping around for an auto loan. Don’t jump at the first offer. Instead, look for a loan with a fair interest rate. A study by the Center for Responsible Lending shows that individuals paying excessive interest rates were more likely to get behind on payments, thus having their vehicles repossessed.
If your monetary woes are the result of circumstances beyond your control, and you have previously demonstrated the ability to make regular payments, a credit union may be able to assist you with your loan. Because of their local roots and understanding of issues impacting the community, such as mass unanticipated job loss, they can typically be more flexible with auto lending matters.
Chapter 7 versus Chapter 13
Since the official start of the Great Recession in December 2007, over 7 million consumer bankruptcies have been filed. Although debts can linger on their record for as much as ten years, nearly 70 percent of filers opt for Chapter 7 so that the majority of their debts will be eradicated in a few months.
In an attempt to retain their assets, the remaining filers choose Chapter 13. These filers may take as long as five years to pay off their debt, and even after that, the blemish may stay on their record for as long as seven years. Over that length of time, it’s likely that an individual may need a new vehicle. Bankruptcy trustees realize this, and are empathetic.
That being said, don’t expect to get a loan approved for a new Porsche. Typically, you’ll get the go-ahead for a modest used vehicle for around $20,000 with a maximum interest rate of about 15 to 18 percent. That’s a great deal more than someone with a high FICO score would pay. However, the longer it’s been since you filed bankruptcy, the better your odds of achieving a lower rate, and an auto loan paid on schedule is, perhaps, one of the best post-bankruptcy credit rejuvenators.
Tips For Buying a Car Post-Bankruptcy
1. If you’re already a member at a credit union, try to capitalize on your previous healthy track record of making auto and mortgage payments on time.
2. Avoid “buy here- pay here” lots.
3. Check with the Better Business Bureau for previous complaints about a car dealer before doing business with anyone. Some unscrupulous dealers may try to take advantage of your situation.
Contact Our Dripping Springs Bankruptcy Attorneys Today
Bankruptcy doesn’t have to put you in a hopeless situation. Contact our Texas bankruptcy law firm today to speak with one of our experienced Dripping Springs bankruptcy attorneys about how to get your life back on track. Call or contact our Dripping Springs Texas Law Firm today to speak with an attorney. Call (512) 615-3569 to find out how Attorney R. Brian Daniel has helped many other individuals and businesses with legal questions just like yours!