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How To Get a Car Loan After Bankruptcy in Florida?

You might think it will be impossible to secure a car loan after filing for bankruptcy in Florida. However, you might be surprised to learn that you can usually get an auto loan shortly after filing.

Because each creditor establishes its own set of standards for approving applications, you can generally find a lender that is willing to work with you. In fact, many Florida creditors prefer to make loans to people who have eliminated their debts in bankruptcy over those who are still struggling to make ends meet each month.

Car Loan After Chapter 7 Bankruptcy in Florida

Under Florida law, there is nothing legally preventing you from getting an auto loan after Chapter 7 bankruptcy, as long as the court has issued the final discharge in your case. This means if you find a lender that agrees to finance you despite the filing, you can take out a loan as soon as the discharge is complete.

However, we recommend that you wait at least six months before applying for an auto loan, if possible. This time frame will give you enough time to improve your credit score and start rebuilding a positive credit history. Because your credit history is the most significant factor when calculating your credit score, making on-time payments for six months can give your score a substantial bump. A better credit score will let you secure a lower interest rate and more favorable terms.

Getting a Car Loan After Chapter 13 Bankruptcy

With Chapter 13, you don’t necessarily have to wait until your debts are discharged to buy a car. Because a Chapter 13 case remains open for up to 5 years while you are completing your court-ordered repayment plan, Florida law gives you the flexibility to get a car if you need one. If you can show your court-appointed Trustee that buying a vehicle is a necessary and reasonable request, they will likely give you permission to do so.

What Are Interest Rates?

An interest rate is the price a lender charges you in exchange for borrowing money from them. This rate is usually expressed as a percentage of the total amount you borrowed using the annual percentage rate (APR).

If you take out an auto loan after filing for bankruptcy, you can expect to be assessed a relatively higher interest rate than you would have been had you not filed. However, even if you initially get stuck with a subprime interest rate, refinancing for a lower rate once your credit score improves can help you pay less in interest.