Reliable transportation to and from work is a significant consideration for those considering bankruptcy in North Carolina. Lenders always run credit checks when someone needs a car loan, so your filing type can affect whether you will qualify for a loan. Here is what you need to consider when filing for a specific bankruptcy type.
Bankruptcy doesn’t prevent getting an auto loan
Your credit options will be limited after Chapter 7 and Chapter 13 bankruptcy, but filing shouldn’t completely prevent you from getting a loan. Bad credit lenders may approve you for an auto loan, even when your score is in the 500s. Other options include working with a credit union, which may allow you to secure a lower interest rate, as these are not-for-profit entities. However, you must realize that you will pay a higher interest rate and may have to finance your vehicle purchase for extended periods.
Other options include getting someone with excellent credit to co-sign your loan. Before entering such an arrangement, ensure your co-signer fully understands their responsibilities if you can’t meet your monthly payments. As a last resort, consider by-here-pay-here dealerships. These car stores don’t require credit checks, and you may pay more than your vehicle is worth because of ultra-high interest rates. Additionally, some of these dealerships may not report your payments to credit bureaus, so your credit will not improve.
Bankruptcy is not an automatic credit death knell
Although it is true that your credit will take a hit no matter what bankruptcy type you file, most people who file actually recover fairly quickly if they follow the terms of their bankruptcy agreements. Filing bankruptcy is a form of debt relief. The important thing to remember is to follow your filing terms to the letter to restart your life.
The type of bankruptcy you choose to file for should be a careful decision that considers the amount of debt you have along with your specific circumstances. This process of careful consideration should guide you towards the type that best suits your situation, ensuring a more effective debt relief strategy.
