When you filed for Chapter 13 bankruptcy protection, your fully intended to uphold the repayment schedule laid out by the trustee. But you’ve had a few lean years and had to convert your Chapter 13 into a Chapter 7 bankruptcy filing.
Now, more bad luck struck. You find yourself needing to immediately purchase a vehicle. But is that even possible after a bankruptcy conversion?
It is still a single bankruptcy filing
Lenders who are willing to finance auto loans for customers with multiple bankruptcies are rare and expensive. But while it might seem that you had two distinct bankruptcies (Chapters 7 and 13), you really just have one bankruptcy.
When you became unable to meet your financial obligations under the terms of your Chapter 13 bankruptcy, you thereby converted it to a Chapter 7. These filings are slate-wipers, meaning that your bankruptcy gets resolved within a few months without the need to repay creditors. The only potential problem you face is losing some nonexempt property in a Chapter 7 that was formerly exempt under your Chapter 13 bankruptcy filing.
Subprime lenders may be your only option
With just a single Chapter 7 bankruptcy on your record, you will immediately get bombarded with offers to rebuild your credit. Of course, some are much better offers than others, but you should be able to find a company willing to finance your car loan.
Look for the best deal for your auto loan
Shop around to make sure that you get the best auto loan deal with the lowest interest rate. You may have to sift through quite a few offers. Make sure to make all car note payments on time, as well as for other bills you accrue while rebuilding your credit.
It’s always important to remember that bankruptcy isn’t the end of the world. In fact, it’s usually a first step to a better future.