In-house car financing

You might be able to find a used car yard that offers its own in-house car financing, however these kinds of operations are getting increasingly rare in Australia. If you do manage to find one you are probably going to be restricted to the cars in their yard and you should definitely proceed with caution when doing so, as there are reports of horror stories in regards to some of the deals that have been provided by some of these operations.

Waiting for your bankruptcy to be discharged

It’s pointless applying for any kind of car finance while you’re bankrupt. If you’ve already declared bankruptcy the best thing you can do is to begin to position yourself as a stable individual by holding down a regular full time job, remaining in the same residence and building your savings where possible.

Credit checks

Every motor financier will run a credit check to see what is on your credit file prior to lending you money, so the more times you apply, the more activity you have on your credit file and this can make things look worse when you are in a position to obtain an approval for a car financing.

Bankruptcy only option?

Bankruptcy is a big decision and often it cannot be avoided, but real consideration needs to be taken into account prior to declaring bankruptcy, as there may be better options as bankruptcies can affect you for the longest period out of any kind of credit file adversity.

If you have the ability to make arrangements with your creditors, even if they place a default on your credit file, this can be a much better long term solution, as those defaults will drop off your file quicker than a bankruptcy will and you also won’t be noted on the bankruptcy register. This also allows you to still be a Director of a company if you wished.

A Part IX Debt Agreement could be another option, but this is treated in much the same way as a full bankruptcy by many auto financiers and will stay on your file just as long as a full bankruptcy. However, when you are discharged, you may have a few more options when looking to obtain approval on a bad credit car loan as you still kept up your obligation by making payments towards your debt agreement.

It is best to review all your options and get good, independent, legal advice prior to declaring bankruptcy as it is a long term decision that can have impact on your credit history for quite a lengthy period of time. It’s important to remember that there are businesses out there offering credit repair and debt help services. These organisations may not have your best long term financial interests at heart as they are businesses like any other. So always get solid, independent legal and financial advice before declaring bankruptcy or entering into a Part IX Debt Agreement.

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