Car Loan After Bankruptcy

Car Loan After Bankruptcy

Did you know that you can still get a car loan after bankruptcy if you know where to look? There are numerous car loan companies that specialize specifically in bad credit financing options for those looking to buy a car

When an individual is ready to file for bankruptcy, they must attain the services of a trustee. There are numerous trustee offices within Canada that can help with this process. The trustee will notify all creditors of your filing. In most cases, first-time bankrupts are held for nine months. Once the nine-month period is up, the individual is discharged and absolved of all debts. If an individual has an auto loan, they sometimes have the option of maintaining it outside of bankruptcy or absolving that debt.

Applying for a car loan after bankruptcy

Applying for a car loan after bankruptcy does not have to be a difficult. In fact, many people have successfully obtained a car loan the day after being discharged from there bankruptcy. Re-establishing your credit is the most important step to take after your bankruptcy has been discharged and applying for a car loan is one of the best ways to help build back your credit history

Getting a car loan after bankruptcy is the first step in rebuilding your credit. After that it's up to you. Be sure to buy a car that fits well within your means and make all payments on time. If you follow these easy steps, you will be well on the way to rebuilding your credit!

Last year, more than 110,000 individuals filed for personal bankruptcy in Canada and this number is sure to increase this year.

Dealing with major banks

Filing for bankruptcy does have a negative impact on your credit. However, if you are at a point where you need to take this option, chances are you already have bad credit, to begin with. When you are completing filing for bankruptcy your credit report will reflect it with an R7 rating.  After you have done a consumer proposal, a note remains on your credit for several years. This will significantly impact your ability to acquire a car loan during that period.

After filing for bankruptcy, re-establishing your credit through a prime bank is extremely difficult, if not impossible, they do not like to take bad risks.

When you are completing a consumer proposal, prime banks will not even consider lending you money or giving you a car loan because you are still under the proposal. Most times, they will make you wait for a considerable amount of time, usually 3 or more years before you are able to obtain a car loan.

Although this seems harsh, most prime banks have a good reason for avoiding dealing with people who are going through recently discharged from consumer proposals.