Auto Loans After Bankruptcy

Bankruptcy is defined as the state of an individual where he/she cannot repay the debts incurred. The American law lays down many ways to file for bankruptcy, namely Chapter 7, Chapter 11 and Chapter 13. Chapter 7 Bankruptcy is the most common form of bankruptcy filing. This is also known as straight bankruptcy or liquidation. In this form of Bankruptcy filing, the debtor appoints a trustee who sells his assets to pay of his debts and the debtor is thus discharged of his debts (Chapter 7 bankruptcy, 2004). According to the law, anyone can file for Chapter 7 Bankruptcy.
It is seen that in case of partnerships or corporation, the individuals associated are immediately discharged from their debts but the corporation or partnership still reels under debt till the limitation period is completed. It is pertinent to note that as this form of bankruptcy entails selling of non exempt assets, businesses might not opt for it. Individuals can file this form of bankruptcy and have the facility of certain assets being exempt from liquidation and are discharged from all debts except debts like child support, fines, taxes etc. (“Chapter 7 bankruptcy”, 2007)
This vast scope of the Chapter 7 bankruptcy has led to it being abused. In order to control the abusive filing of Chapter 7 bankruptcy, legislation proposed certain changes. One of the main changes proposed is that anyone spending more than the allowable limits as ascertained by IRS cannot qualify for filing Chapter 7 bankruptcy. Secondly, unless a person is a resident of a particular State for at least two consecutive years, he/ she cannot file for bankruptcy from that State.

In order to ensure that proper use of loans is made, the law has also suggested financial counseling together with payment to be made in full in case of buying expensive items or receiving cash loan within 60 days of filing for Bankruptcy. Also more kinds of debts are included in the list of non dischargeable debts so as to ensure that the provision for filing bankruptcy is not misused (Chapter 7 bankruptcy Laws, n.d.).
Reasons for filling bankruptcy are numerous, the main one being that an individual wants to start of on a clean slate wiping of all his old debts. The second reason is that people who are on the verge of having their home foreclosed will file for bankruptcy to give them the chance to repay their loan in installments, so also to have their car from being taken away by the auto loan company. Another reason for filing for bankruptcy is when a person’s medical bill is very big and the person cannot afford to pay the same. In such cases, filing for bankruptcy may actually reduce or cancel the entire debt. One of the main reasons is also loss of employment, where the person has lost his source of income, and then he files for bankruptcy (Tim, 2005).
In some cases, it is seen that a person has taken more loans then he can manage at a given time and is constantly harassed by his creditors. In order to stop being harassed by such creditors, people file for bankruptcy so also to challenge the false claims of fraudulent creditors. Filling for bankruptcy also ensures that you get help to repay your educational loan and also to ensure that your essential services are not discontinued and also helps you purchase absolutely essential commodities that one cannot buy otherwise (Bankruptcy, 2004).
The common thought is that once a person files for bankruptcy then he will not be granted a loan immediately nor can he request for a credit card. However, in today’s world this is not the case as most institutions are ready to grant loan or disburse credit cards to persons filing for bankruptcy. These institutions feel that the individual has left his/her old debt behind and has started afresh and can thus be given new loan even though the bankruptcy will stay in his/ her credit note for a period of ten years.
The creditors deal with the bankruptcy information by increasing the rate of interest payable but still lend the money or give them the credit card.  A few creditors might hesitate but their opinion changes once they see that the individual is diligent in repayment. Thus once the repayment schedule is followed properly and without a hitch then the other credit card companies or organizations giving loan will come forward and offer at the same rate of interest as before filing for bankruptcy. It is seen that an auto loan is the best way to rebuild one’s credit in the market (Reeder, 2005).
In case of credit cards, along with increase in rate of interest one might see a decrease in the credit limit available but this again is temporary till the individual’s credibility is restored. Also credit card companies have started issuing secure credit cards to ensure that the credit availed by the person can be repaid.
Reeder, C., (2005). Auto Loans After Bankruptcy – How Does a Bankruptcy Affect Your Approval? Ezine @rticles. Retrieved February 14, 2007 from
5 things you can do after bankruptcy. (n.d.). Financeguide 101. Retrieved February 14, 2007 from
Chapter 7 Bankruptcy Laws (n.d.). Christianet. Retrieved February 14, 2007 from
Chapter 7, Title 11, United States Code. (2007, January 27). In Wikipedia, The Free Encyclopedia. Retrieved 04:42, February 17, 2007, from
Tim, S. (2005). Top ten reasons people file for Bankruptcy. Ezine @rticles. Retrieved February 14, 2007 from

Don't use plagiarized sources. Get Your Custom Essay on
Auto Loans After Bankruptcy
Just from $13/Page
Order Essay
Achiever Essays
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code RESEARCH

slot online