Bankruptcy Car Loan Timing

bankruptcy car loan timing

Here’s a scenario that happens more often than you might think: You’ve decided to declare bankruptcy or have already filed for bankruptcy and then your car dies. When this happens, it often puts people in a panic. How in the world can you get a car when you’re also dealing with a bankruptcy? Take a deep breath and relax, because Day One Credit can help you find a bankruptcy car loan. However, it’s important to keep in mind the right timing when you’re seeking a car loan after bankruptcy.

Chapter 7 Bankruptcy Car Loan Timing

chapter 7 bankruptcy car loan Timing

Let’s say you’re about to file for a Chapter 7 bankruptcy (also called a “straight” or “liquidation” bankruptcy) when you discover you also need to replace your car. What should you do? You know your credit has been spiraling downward, which is why you’ve decided it is time to file for bankruptcy. In this case, it might make sense to apply for a car loan until after you’ve filed for bankruptcy. If you apply for a car loan before declaring bankruptcy, some lenders will reject you because of your low credit score and high levels of debt, or might be willing to make a loan but with outrageous terms and interest rates.

But if you wait until after you have filed your Chapter 7 bankruptcy, then you can find a lender that specializes in bankruptcy car loans. This is advantageous because those specialized lenders are more willing to lend to you – they see you’ve filed for a Chapter 7 and know that most or all of your worst debts are going to be wiped away. In fact, this is one situation where you might actually get a better rate on a post-bankruptcy car loan than a pre-bankruptcy car loan. When you are pre-bankruptcy, lenders are only going to see your troubled credit, whereas when you are post-bankruptcy, a specialized lender sees you’re in the process of eliminating debts.

When you’re entering Chapter 7 bankruptcy, Day One can begin helping you find the Chapter 7 car loan you need as soon as you have filed and have a case number. There is literally no reason to wait. Many people just assume you have to wait some amount of time before applying, but this is not true. You can apply at Day One the same day you file for Chapter 7 as long as you have a case number.

Chapter 13 Bankruptcy Car Loan Timing

chapter 13 bankruptcy car loan timing

If you’re planning to file a Chapter 13 bankruptcy, the same overall timing considerations apply, with a couple major differences. You have to wait a little longer before Day One can help you find Chapter 13 car loan. When you file a Chapter 13, you have to create a reasonable payment plan for the debts being included in the filing, and that payment plan has to be confirmed by the bankruptcy court. Unlike the Chapter 7 scenario where you can file as soon as you have a case number, with a Chapter 13 you must wait until you have a confirmed repayment plan.

In addition to waiting until you have a Chapter 13 confirmed payment plan, you will also need to get an authorization from your assigned bankruptcy trustee or judge in order take on new debt. Because having a car is considered essential for most people to maintain employment and the income needed to stay on track with your Chapter 13 payment plan, the request should be granted. Please check first with your bankruptcy attorney before doing anything!

Consult with your bankruptcy attorney about adding the new post-petition debt to your Chapter 13 bankruptcy. If it’s a substantial debt, then it might also be in your best interest to amend your confirmed payment plan to account for the new debt. After all, you don’t want the new debt to throw you off from keeping up with your confirmed payment plan.

If you were in an emergency situation where you had to incur the new debt without first seeking court approval, you may still be able to include it in your Chapter 13 and amend your payment plan after the fact by working with your assigned bankruptcy trustee. The trustee might reject your request. If you’re already behind on your confirmed payment plan, the trustee will question how you’ll be able to take on even more debt. But if the trustee is on board, the motion you file with the bankruptcy court should be approved.

Discharged Bankruptcy Car Loan Timing

discharged bankruptcy car loan timing

There is a widely-held belief that if you’re in the midst of a bankruptcy, you should wait to get a car loan until after your bankruptcy has been fully discharged. It’s easy to understand why so many people think this is logical. After all, once the bankruptcy has been discharged, then you have a much better debt-to-income ratio since your worst debts have been eliminated or brought back up to a good current payment status. In addition, people have also heard that lenders want to wait a full two years after discharge before they will consider making a car loan to you. If you don’t need to replace your car, then you can go along with those scenarios. But what can you do when your car decides to die before or right after your discharge?

The good news is that while some lenders who don’t want to take on any perceived risks won’t give you the time of day, other lenders who have developed programs specifically for bankruptcy customers can make sure you get the car loan you need when you need it. Whether your bankruptcy is about to be discharged or was recently discharged, Day One can help you find the discharged bankruptcy car loan that will allow you to get the vehicle you need.

Day One Bankruptcy Car Loan Timing

day one bankruptcy car loan timing

All the timing issues around getting a car loan after bankruptcy covered so far in this article have been about when you can apply for a loan. Now it’s time to talk about timing in terms of how long it takes to find a bankruptcy car loan from Day One. This is one of the major advantages of working with us – we’re FAST!

You’ll be able to fill out our online loan application in less than five minutes. And once you’ve submitted your application, you’ll hear back from us in a matter of minutes! What happens in that short amount of time? We quickly review your application and make sure we have the information we need. If we need to clarify anything, we’ll get in touch. When we see everything is good to go, then your application is sent out to our network of lenders. They send their loan offers back to us and we choose the one with the best terms to present to you. Our process works so well because when multiple lenders compete for your business, you win! If you have questions or need additional information, please feel free to contact us !

Here’s a scenario that happens more often than you might think: You’ve decided to declare bankruptcy or have already filed for bankruptcy and then your car dies. When this happens, it often puts people in a panic. How in the world can you get a car when you’re also dealing with a bankruptcy? Take a … Continue reading “Bankruptcy Car Loan Timing”

Bankruptcy Fresh Start Program: The What and Why

bankruptcy fresh start program

When you’re in the process of deciding whether or not to file bankruptcy in order to get some debt relief, or if you’ve recently filed, you might start tuning into things you never noticed before. One example could be the phrase fresh start program. In this article you’ll find out what a fresh start programs are and how they can help you make the most of the new beginning filing bankruptcy gives you.

Your Post-Bankruptcy Mission: Rebuilding Your Credit

rebuilding your credit

Filing for bankruptcy can sometimes feel like an ending – the last resort when you’ve accumulated so much debt that you feel like there’s no way out. After all, many people view bankruptcy as some kind of failure, so there can be a lot of stigma around it. But many people are suffering from crushing debts due to circumstances largely beyond their control, such as the unexpected loss of employment, a medical emergency or other life change that threw their financial lives into disarray. Whatever the reasons may be that have brought you to the place where you need to file bankruptcy, it’s much better to think of it not as an ending but as a new beginning. It’s a second chance to get your finances under better control. Thinking of it as a new beginning will motivate you to do the single most important thing you must do after filing, which is to rebuild your credit.

After the stress of filing for bankruptcy, too many people don’t do anything at all. They just wait for the process to be over, but when they do that, they’re missing out on time that could have been spent rebuilding their credit. The day you file for bankruptcy should be the day you start figuring out how to restore your credit. One way to that is through a fresh start program. This is not to be confused with the IRS “Fresh Start” initiative that is specifically geared towards helping people who owe a lot of back taxes to the government protect their property and resolve their tax issues.

A Bankruptcy Fresh Start Program Can Work Wonders

fresh start relief

Many people think that bankruptcy does so much damage to their credit that there’s nothing they can do to fix it except wait the seven or eight years it takes for it to drop off their credit report. Not true! No one can put their financial life on hold for that long, and there are lenders out there who understand this and have developed specialized lending programs designed specifically for bankruptcy filers. These are the fresh start programs that help you rebuild your credit, even if they don’t specifically call them fresh start programs.

One way to restore your credit after a bankruptcy is to first and foremost keep up-to-date on your monthly payments for any debts that weren’t included in the bankruptcy, such as your mortgage or car payment. But another thing you can do is get a new loan and make on-time payments each and every month. Here’s where most people fail to take action. They assume there’s no way they can get any new credit with a recent bankruptcy filing. Again, not necessarily true! The whole point of a fresh start program is to do exactly that – extend you some credit in spite of your bankruptcy filing. While many lenders are unwilling to do this, but lenders with fresh start programs are ready to help.

The most important thing to keep in mind with any bankruptcy-related fresh start program is that in order to reap the credit-rebuilding benefits, you have to make your monthly payments on-time every time, so make sure you don’t take on a loan with payments you can’t afford.

How Does a Fresh Start Program Work?

how fresh start program works

Fresh start lenders are willing to take an extra risk by making loans to bankruptcy filers other lenders wouldn’t consider, but that also means that the interest rate you pay on the loan is going to be higher than normal. Think of those higher rates as a small price to pay for the chance to rebuild your credit so your future will be brighter!

While a fresh start program is geared towards helping bankruptcy filers get new credit, there are still going to be some eligibility guidelines you’ll have to meet. For example, at Day One our lenders want to see a maximum PTI (payment-to-income ratio) of 17% and a maximum DTI (debt-to-income ratio) of 50%. What do those numbers mean? Your PTI is how much of your gross monthly income would be taken up by your monthly car and insurance payment. Your DTI is how much of your monthly gross income goes toward all your various debts. We do not, however, have a minimum credit score requirement. In fact, you could have a score of 0 and might still qualify for a loan Day One finds you.

The most common types of fresh start programs are those that help bankruptcy filers get a mortgage, a car loan or a secured credit card. With a secured credit card, you make a cash deposit to cover the credit limit of the card so the card issuer is not at risk of losing out if you fail to pay the bill. After proving yourself with secured credit card over a period of time, you will eventually be able to get an unsecured card that doesn’t require a deposit. In the case of a mortgage or car loan, there will be more eligibility requirements since those are bigger loans.

Day One’s Fresh Start Program is for finding a Bankruptcy Car Loan

Day One bankruptcy car loan

Day One Credit is a bankruptcy fresh start program that helps people find the car loan (and car) they need even though they have a recently-filed or discharged bankruptcy. Many people panic when they file for bankruptcy and soon afterwards realize they need to replace their car. How can they get a car loan when they just filed for bankruptcy? The fresh start program at Day One was designed specifically for this kind of situation. We help each eligible customer find the bankruptcy car loan that will best meet their specific needs.

At Day One we take great pride in sitting down with each customer to make sure we understand their needs as well as ensure eligibility for the lending programs in our network of lenders. Our prequalification eligibility guidelines include the following:

Income. Your minimum gross monthly income has to be $2,200 per month or higher as shown on either W-2 forms from your employer or 1099 forms if you’re self-employed.

Bankruptcy Status. Your bankruptcy must be filed or recently discharged. We can work with you as soon as you get your Chapter 7 case number or your Chapter 13 confirmed repayment plan. We have programs for both open and recently discharged bankruptcies.

Valid Driver’s License. You must hold a valid driver’s license that is not suspended.

Even if you meet those guidelines, there are instances where we don’t recommend going for a bankruptcy car loan, including the following:

You already have a great car. If your current vehicle is newer, has relatively low mileage, is paid off or close to being paid off, then it makes sense to stick with it.

No stable income. If your income is not stable or you know your income is about to drop or your expenses are about to go up (or both).

The cosigner on your car did not file for bankruptcy. You can damage your cosigner’s credit if they did not file bankruptcy with you. You have the right to surrender your car, but your cosigner does not have the same right, and the lender will still go after your cosigner.

The benefits of working with Day One to find a bankruptcy car loan are important to describe. One big benefit is that we have no-money-down options available to most customers. Another benefit is our extensive experience. We’ve been working exclusively with bankruptcy filers for years and know how to make this work for you. Our customers get great results and enjoy being treated like VIPs. We’ve developed a network of experienced lenders who have programs designed specifically for bankruptcy customers, and when they compete for your business, you get a better deal. You’ll also enjoy finding the car you need in our inventory of high-quality vehicles – newer model years in great condition with low miles that will serve you well for years to come.

If you’re ready to make the most of your bankruptcy fresh start, apply now by filling out our short application online and get an initial answer within minutes!

When you’re in the process of deciding whether or not to file bankruptcy in order to get some debt relief, or if you’ve recently filed, you might start tuning into things you never noticed before. One example could be the phrase fresh start program. In this article you’ll find out what a fresh start programs … Continue reading “Bankruptcy Fresh Start Program: The What and Why”

Choosing a Bankruptcy Lawyer

choosing bankruptcy lawyer

Close to a million non-business consumers seeking debt relief file for bankruptcy each year. Once you’ve decided that filing bankruptcy might be the only way for you to get your debt load back under control, the best way to make sure you choose the right type of bankruptcy and make a successful filing is to work with a qualified consumer bankruptcy lawyer. But how do you go about choosing a bankruptcy lawyer? This article will give you our opinion on how to make an informed decision. And if you’re asking yourself, “How do I find bankruptcy lawyers near me?” we’ll provide a great answer to that question at the end of this article.

A Solo Bankruptcy Lawyer, Small Firm or Bankruptcy Mill?

types of bankruptcy lawyers

There are different approaches in the legal industry to bankruptcy cases. Some firms have figured out how to use non-lawyer paraprofessionals to handle the bulk of the work, including basic information intake, explaining the process, and making sure you gather all the required documentation about your debts and finances. With this “mill” approach that’s all about handling a high volume of cases, you might not even see a real lawyer until you have the meeting with creditors around a month into the whole process. People who end up going with a bankruptcy mill often feel like they were just another case and that their personal needs weren’t really considered. It’s also important to understand that there isn’t usually any financial advantage to going with a mill. Bankruptcy lawyer fees tend to fall within a fairly tight range in any given market. We recommend you go with a small firm or solo bankruptcy lawyer where you’re more likely to get the individual care and attention you deserve.

Focus on Your Local Geographic Area

bankruptcy attorney near you

The last thing you need is adding a long commute to your already-stressful situation. If you’re in the greater San Diego area of California, there are many qualified bankruptcy attorneys ready and willing to serve your needs. There is no need to travel long distances to find a great bankruptcy lawyer, so narrow your search down to those who are within an easy, comfortable distance from your home or work.

Bankruptcy Lawyer Reviews and Testimonials

attorney reviews

As you visit the websites of various bankruptcy lawyers, avoid making the mistake of only relying on the customer testimonials provided on the site. Every attorney or firm wants to put their best foot forward on their own website, so you can assume that you’ll only find positive, glowing testimonials there. What you want to see are the customer reviews that are written and posted on sites like Google, Yelp and so on. You also get the advantage of seeing how many reviews have been posted and an overall rating based on all those reviews. This is a great way to further narrow your search.

The Costs of a Bankruptcy Lawyer

bankruptcy lawyer costs

You want to be prepared for the costs of filing bankruptcy. The court-required fees to file in California are $335 for a Chapter 7 and $310 for a Chapter 13 (these fees do go up over time, last updated in California in 2016). Your bankruptcy lawyer fees are an additional cost you pay for the help provided in taking you through the whole process. Most bankruptcy attorneys will handle Chapter 7 bankruptcies for a flat fee that can range from $1,000 to $1,600 or more, depending on the complexity of your situation. In California the average is around $1,560 (the national average is $1,450). Attorney fees for a Chapter 13 are higher than a Chapter 7 because a Chapter 13 bankruptcy is more complicated due to its required repayment plan. When there is no business involved in a Chapter 13, the southern district of California that includes San Diego assumes fees in the range of $3,300 to $5,000 are normal and acceptable. If you’re in a low-income situation where you make less than 125% of the federal poverty level, you might qualify for free legal assistance to file bankruptcy. Options for this in San Diego County include the Legal Aid Society of California and the San Diego Volunteer Lawyer Program.

Success Rates for Chapter 13 Filers

chapter 13 success rates

If a bankruptcy lawyer suggests that a Chapter 13 sounds like a good option for you, ask about their success rate on Chapter 13 filings. Nationwide, a lot of Chapter 13 cases fail. In fact, on average only 33% are successful. In part this is because people who try to file Chapter 13 without the help of a bankruptcy lawyer almost always fail, so working with a good attorney will increase your likelihood of success to more than 50%. But also keep in mind that these low success rates aren’t necessarily the fault of the bankruptcy lawyer. A Chapter 13 bankruptcy lasts 3-5 years – plenty of time for life to throw you a curve ball that throws you off your intended repayment plan. When that happens, your case may be dismissed or converted into a Chapter 7 case. But what you can say is this – bankruptcy lawyers with Chapter 13 success rates higher than the national averages are doing something right!

Personality, Customer Service, and Language Skills

attorney personality

You want to be comfortable with the bankruptcy lawyer you choose, so pay attention to their personality and customer service skills as you interact with them. You want someone who clearly cares enough to learn the particulars of your situation, your needs and wants to get you the best outcome possible. Also, if English is not your first language, then you’ll want to look for bankruptcy attorneys and firms that offer bilingual services so you can communicate in the language that works best for you. In the San Diego, there are plenty of options available to find Spanish-speaking bankruptcy legal assistance.

Bankruptcy Attorneys Recommended by Day One

bankruptcy lawyers we recommend

One quick way to come up with a short-list of experienced bankruptcy lawyers in your area is to visit our recommended bankruptcy attorneys page. We’ve been helping bankruptcy filers find the used car loans they need for years. This has allowed us to get to know a number of bankruptcy attorneys, and we are proud to recommend any one of them to you. Your search for an experienced bankruptcy lawyer just got a whole lot easier! And if you find you need to replace your car after filing bankruptcy, we work with a network of excellent lenders who will compete for your business.

 

Close to a million non-business consumers seeking debt relief file for bankruptcy each year. Once you’ve decided that filing bankruptcy might be the only way for you to get your debt load back under control, the best way to make sure you choose the right type of bankruptcy and make a successful filing is to … Continue reading “Choosing a Bankruptcy Lawyer”