After completing bankruptcy, your credit score has probably seen better days. When looking for a bad credit auto loan in Chicago, you have options after bankruptcy even with a tarnished credit score.
Differences Between Chapter 7 and Chapter 13 Bankruptcy
There are a few key differences between Chapter 7 and Chapter 13 bankruptcy filings. With a Chapter 13, you create a repayment plan, with the help of your bankruptcy trustee, to pay off at least some of your debts. .
With a Chapter 7, your non-exempt property is liquidated to pay off as much debt as possible. Exempt property is property that you can keep during bankruptcy. Exemption limits vary by state, and some states even allow you to choose between state or federal exemption guidelines. However, according to the legal website Nolo.com, in Chicago and the rest of the state of Illinois, you must use state exemptions.
The length of time that bankruptcies stay on your credit reports also differs. With Chapter 7, bankruptcy stays on your reports for 10 years from the date of your filing, while a Chapter 13 stays on your reports for seven years from the date of your filing.
Another key difference is the time it takes to be unloaded. With Chapter 7, since you are in the process of liquidating your property, bankruptcy is usually discharged between four and six months from the start date. That’s against Chapter 13, which takes three or five years until any remaining debt is paid off.
With either filing for bankruptcy, you can apply for a bad credit car loan once you have received your discharge documents. Getting a car loan in Chicago after bankruptcy doesn’t have to be difficult, and it helps to know what to expect.
Getting A Car Loan For Bad Credit After A Bankruptcy Release
After a discharge of a Chapter 7 or Chapter 13 bankruptcy in Chicago, you can almost immediately apply for a car loan with a subprime (bad credit) auto lender.
When shopping for a car after bankruptcy, the two most important things to prepare are getting your discharge papers and putting up a down payment. You should bring your discharge documents to the dealership because a discharge usually does not appear on your credit reports for at least 30 days after bankruptcy ends.
Bad credit auto lenders use more than your credit score to determine approval, including a down payment. A down payment not only helps you pay less overall, but shows the lender that you are committed to completing the auto credit following bankruptcy. With a bad credit auto loan, Bridge Payday lenders typically require a down payment of at least $ 1,000 or 10% of the vehicle’s sale price.
Here are some of the other conditions risk lenders use to determine approval:
- Returned – Minimum monthly income of at least $ 1,500 to $ 2,500 (before taxes), proven by recent computer generated check stubs.
- Employment – Be in post for at least six months to one year and have a professional experience of three years without interruption of employment of more than 30 days.
- Proof of residency – The more stable your life situation, the better. Bring a current utility bill or bank statement with your address, in your name.
- Proof of phone operation – A fixed or flat-rate telephone bill for a telephone that must be in your name; prepaid cell phones don’t count.
- Valid driver’s license – This means that your license cannot be suspended, revoked or expired and that your current address must be indicated.
Each subprime lender is different, and depending on your unique credit situation, they may require more or less to review you for approval. Those listed are the items most commonly requested by bad credit lenders.
Where To Find Auto Loans For Bad Credit In Chicago
Getting a car loan after bankruptcy can be stressful and overwhelming if you’ve been turned down by traditional auto lenders. Here has Auto Express Credit, we are in contact with lenders across the country, including Windy City, who work with borrowers on credit and people in unique credit situations.
We want to help you find a subprime lender in your area for a post-bankruptcy auto loan. To get started, simply fill out our free auto loan application form.