Q: Hello, I filled a chapter 7 about 5 months ago. I was discharged in December. Still can't get a auto loan.
I also did a volunteerly return of a vehicle within my chapter 7. I've tried many times to get a auto loan but, everyone wants about $3000 to $4000 on a $11,000 to $12,000 vehicle. The higher the vehicle the more down. I had lenders to send me lenders with my credit score being between 621 & 639. Even some buy here pay here places not accepting. What do I do?
I'm not in the lending business, thank heavens, lol, but I have been acting as general counsel for a few credit unions in the tri-state (PA, DE and NJ) region, and this issue occasionally comes up. I advise my lenders that recently bankrupt borrowers are a better than average risk in an uncertain economy, because you must wait eight years before obtaining another bankruptcy discharge, and anyway, auto lenders are protected under the Bankruptcy Code.
Beware of those buy here/pay here places. I have heard many stories of such car dealers selling the same care four or five times, each time repossessing for a missed payment or two.
The borrowers I've represented have the best luck at credit unions. Assuming you are employed, and have a regular income, join a credit union, and have your employer automatically (by automatic deposit) pay your wages into your checking account at a credit union. Once the CU sees that your income is steady and immediately deposited into the account they offer, and given that you've had a recent bankruptcy discharge, the CU will probably loan you the needed funds (if your income shows you can afford the car loan payment on top of food and shelter).
Timothy Denison agrees with this answer
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