Its Becoming Harder To Get Car Loan After Chapter 7 Bankruptcy

Its more difficult for anyone to get credit today, and its particularly becoming more difficult to get credit after filing bankruptcy. I had a conversation yesterday with a man who manages a large car dealership. He has been in the car business for over 20 years. He said that before the banking crisis banks would give car loans to people within two years after they had filed Chapter 7 bankruptcy if they had average or better credit scores. Now, lenders are not considering car loans until at least three years after bankruptcy. Good credit scores are insufficient. Car lenders are also examining debt/income ratios, and they are denying car loans to people if it looks like they have again, after bankruptcy, taken on more debt than they should or could afford.

The car manager explained that lenders were burned by lending to people wth high creditor scores in the past few years. Borrowers buried in debt were able to maintain high credit scores by timely making minimum payments. These high-score borrowers were disasters waiting to happen. After the credit disaster did happen for too many car borrowers the lenders have learned their lesson (for the time being). If you have filed a bankruptcy and want a car loan with average interest rates you may have to wait three years, have a decent credit score, and show the car lender that you can comfortably afford the car loan.

posted by Jonathan Alper, banrkuptcy and asset protection attorney, Orlando, Florida

Comments

[Yamah R15]

I have something much better to choose people who had good credit history.

[car loans]

after economic crisis, all banks start to beware of their loans, because most of people's income have been reduced, but loans are still the same.

[Car Loan]

Accepting consumers with a high bad credit score is really a failure of some lenders. Much better to choose people who had a good credit history.

[enrique]

I need to by a van, I'm living from s.s only, so I need a loan for $5000 problem: in the loan web I don't know who is legal or not, live in Florida 32792 $978 income,,what to do, where to go??help, please

[auto loan calculator]

In these tough financial times, having one debit on a house or car would be the best option thank 2 as one would be paying to amounts of interest and having this they could or would fall into serious trouble, and get themselves into huge amounts of debit resulting in them loosing their homes or and their cars.

[Rob]

On the other hand, I've known some people who went bankrupt and still have a credit score in the 700's. Do credit ratings take the bankruptcy into account, or is that a completely seperate matter and handled differently? When applying for loans does the credit rating do any good, or does the bankruptcy just flat out cancel it out?