As many people in Texas know, it is sometimes necessary to file bankruptcy. Things happen that cause financial hardship, and debtors need relief. Chapter 13 bankruptcies can span three years or five years, sometimes creating a challenge for debtors who find themselves needing to purchase an automobile during this time.
The good news is that it is possible to obtain financing for an automobile while in a Chapter 13 bankruptcy. The first step is to find a willing lender. This may be the most challenging step of the process. Sometimes, a car dealer can help negotiate with multiple lenders in order to secure financing in these circumstances.
If all else fails, a subprime dealership may be able to channel financing through lenders that specialize in loans to persons with poor credit. The downside to this is that the debtor will likely pay a very high interest rate on the loan, but if the need for an automobile is serious enough, it may be worth it.
When financing is obtained and the terms of the loan are worked out, the dealer will need to prepare a “buyer’s order” for submission to the court. If the request is denied by the court, the debtor has little recourse other than trying to purchase a different vehicle or waiting until the existing bankruptcy debt has been paid down further.
When debt has become overwhelming, Chapter 13 bankruptcy or other types of bankruptcy may be the best solution. When considering bankruptcy, it may be a good idea to seek the services of an attorney experienced in all matters of bankruptcy law. Doing so might help ensure that the type chosen is the best fit for the debtor. An attorney may provide counsel when other financial matters arise while the bankruptcy is in process.