Chapter 7 And Auto Loans
There are certain benefits of filing Chapter 7 bankruptcy. Unlike Chapter 13, the former relieves the consumer completely off debts that have been filed in the bankruptcy. Many lenders consider loan applications from people who have just filed a Chapter 7 bankruptcy. |
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The lenders, however, do not transfer the loan amount directly to the consumer. Instead they offer to finance the car for the consumer through the auto car dealership. You will need to find a dealer who has access to the bankruptcy loan lenders.
However, the process these days is pretty simple and straight forward. You need to find an auto dealer in your area online and then you will be guided through the rest of the process online. You will also be provided with various financing options after a bankruptcy.
When you file for a Chapter 7 bankruptcy, it can cause a delay in foreclosure of a mortgage or also in the repossession of a car. In the case of Chapter 7 bankruptcy, auto loan lenders demand that their debts be reaffirmed. A reaffirmation agreement will restore the debt under the same conditions that existed before the bankruptcy.
Some auto loan agreements also include a clause saying that Chapter 7 cannot be filed in the contract. So, while filing for bankruptcy, one must be careful and wary of such clauses. Auto loan lenders also include that they will either repossess the vehicle or the debt should be reaffirmed. Reaffirmation in most cases is almost impossible and this can put the debtor in a no win situation.
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