Filing a Bankruptcy for individuals can be of two types, Chapter 7 and Chapter 13. The effect of Bankruptcy can stay on your credit score card for up to 10 years. There are certain things which need to be considered while planning to file for a bankruptcy.

If you are considering repossession for your vehicle, then this won’t be the right time. If repossession occurs before filing for bankruptcy, then it is implied that you are using bankruptcy to avoid paying your debts and after filing will indicate that you have not learnt your lesson. And if repossession occurs outside of repossession then you will find it very difficult to get an auto credit from anyone, including the subprime lenders, for many years.

If you have filed your bankruptcy under Chapter 13, you will need an order from the trustee to obtain addition loans. Without this order you are not allowed to apply for any kind of loans during bankruptcy.

The lender has the right to repossess your vehicle if you fail to make payments and you are filed under Chapter 7. You may also not be given approval for another vehicle loan from your lender after filing for bankruptcy.

If your case has been filed under Chapter 7, and you vehicle has been repossessed but the case has been discharged, you have a chance to obtain an auto loan from a subprime lender. However, a low interest rate is not guaranteed. This type of loan is called as a bad credit auto loan.

Repossession is of two types, i.e. voluntary and involuntary. In an involuntary repossession, your vehicle is taken away by a repossession service whereas a voluntary repossession happens when the vehicle is brought to a place decided by the lender and then surrendered. Though there is not much difference in both types, it is still named differently.

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