Bankruptcy Information on a Car Loan
A person who declares bankruptcy might be curious about what will happen to his car if he has a loan on it. A person recovering from bankruptcy might consider applying for a car loan to help rebuild his damaged credit rating, but there are a few things a person must consider before applying for a new car loan after bankruptcy.
Other People Are Reading
-
Car Loans and Chapter 13
-
A person with a car loan who files for Chapter 13 bankruptcy must repay the entire car loan--if the car was purchased within 30 months of filing for bankruptcy.
Car Loans and Chapter 7
-
Chapter 7 bankruptcy requires the purchaser to pay for the retail replacement value of the car in most circumstances,
-
Wait time
-
Bankruptcy remains on a person's credit rating for up to seven years, but a consumer can rebuild his credit rating by taking out a car loan and making payments on time. A person who declares bankruptcy should wait at least two years after filing before taking out a car loan.
Loans Repair Credit Ratings
-
People can get car loans a few years after declaring bankruptcy. Making the payments on time helps a person with poor credit achieve a higher credit score. The process takes time and a person should make sure they can make the payments on a new car whether a bankruptcy declaration shows up on their credit report.
Interest Rates to Expect
-
People with poor credit likely will have to pay 10 percent or more for interest on any type of loan. Car loans given to people with bad credit range from 8 percent to to 10 percent.
-
