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Michael D. Hart, P.C.
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540-627-6520
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Buying a car after a bankruptcy

Filing for bankruptcy may have many consequences for those who file in Virginia or any other state. Anyone who files may see their credit score go down, and individuals who file for Chapter 13 protection generally have to make payments to creditors over three or five years. One other consequence of bankruptcy is that it can be harder to purchase a vehicle. This can be true whether a person is filing for Chapter 7 or Chapter 13 protection.

In some cases, a debtor may choose to convert a Chapter 13 bankruptcy into a Chapter 7 case. If an individual qualifies, it may make it possible to have debts discharged and the case resolved with six months. Once the Chapter 7 case has been completed, an individual is free to attempt to purchase a vehicle. However, it may be necessary to do so through a subprime dealer because of the impact bankruptcy has an individual's credit score.

In many cases, these dealers will do a more complete evaluation of a person's ability to afford a car payment. For instance, an employment and income review may be part of approving a loan application. A dealer may also look favorably on the fact that filing for bankruptcy lowers a person's debt-to-income ratio, which may make it easier to repay the loan.

Filing for Chapter 13 bankruptcy may make it easier to retain property while reorganizing existing debt balances. It may also be an ideal way to get out of a car payment or renegotiate a mortgage payment. Those who are planning on seeking bankruptcy protection may want to do so with the guidance of an attorney. He or she may be able to discuss the benefits of bankruptcy and how to file for it.

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Michael D. Hart, P.C.
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Roanoke, VA 24011

Phone: 540-627-6520
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