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Securing a car loan following Chapter 7 bankruptcy

One of the major concerns people who file for bankruptcy justifiably express to financial experts is that a filing will ruin their chances of securing a loan. However, Kentucky residents who file for Chapter 7 bankruptcy may be increasing their chances by clearing their existing debt and preparing for the road back to better credit. While not all lenders can or will work with someone who has filed for bankruptcy, the door is still open for someone with a bankruptcy on his or her credit score to secure loans moving forward. 

Of course, there are contingencies on this assertion. For one thing, it is imperative for a debtor to ensure that his or her bankruptcy proceeded to the discharge phase, rather than being dismissed. If a bankruptcy is dismissed, it means the filing was not completed successfully, and people in this situation are often not eligible for loans like an auto loan. However, if the bankruptcy is successfully discharged, meaning that assets were liquidated to pay down creditors and unsecured debt was wiped clean, there is a much better chance. 

Chapter 7 leaves a mark on a credit report that can last up to 10 years, and a credit score is often affected by filing. However, some lenders, often called subprime lenders, will still work with those who struggle with credit. These lenders often work through special finance dealerships in the case of auto loans and will work with a creditor to find a loan that works best for them. 

Filing for Chapter 7 bankruptcy can leave some Kentucky residents uncertain about many parts of their financial futures. Seeking out the support of an experienced bankruptcy attorney to work with the creditor on the finer points of bankruptcy law can help to assuage some of that uncertainty. In the end, for some people, filing for bankruptcy can make all the positive difference in the world. 

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