Can I Get A Car Loan If I Have Declared Bankruptcy
When you declare bankruptcy, you most likely cannot obtain any kind of motor financing unless your bankruptcy has been discharged.
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In-House Car Financing
The only option you may have would be to approach some of the car yards that have their own internal in-house finance options, but you are restricted to the cars in their yard and you should definitely proceed with caution when doing so, as there are a lot of horror stories in regards to some of the deals that have been provided by some of these operations.
Waiting For Your Bankruptcy To Be Discharged
This can give you time to prepare yourself once your bankruptcy has been discharged. It would be pointless applying for any kind of loan or credit card whilst undischarged as this is just going to place multiple enquiries on your credit file that will not result in any positive outcome.
Every motor financier will run a credit check to see what is on your credit file prior to lending you money, so the more times you apply, the more activity you have on your credit file and this can make things look worse when you are in a position to obtain an approval for a car financing.
Bankruptcy Only Option?
Bankruptcy is a big decision and often it cannot be avoided, but real consideration needs to be taken into account prior to declaring bankruptcy, as there may be better options as bankruptcies can affect you for the longest period out of any kind of credit file adversity.
If you have the ability to make arrangements with your creditors, even if they place a default on your credit file, this can be a much better long term solution, as those defaults will drop off your file quicker than a bankruptcy will and you also won’t be noted on the bankruptcy register. This also allows you to still be a Director of a company if you wished.
A Part IX Debt Agreement is another option, but this is treated in much the same way as a full bankruptcy by many auto financiers and will stay on your file just as long as a full bankruptcy. However, when you are discharged, you may have a few more options when looking to obtain approval on a bad credit car loan as you still kept up your obligation by making payments towards your debt agreement.
It is best to review all your options and get good legal advice prior to declaring bankrupt as it is a long term decision that can have impact on your credit history for quite a lengthy period of time.
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