Leasing a Car After Filing Chapter 7 Bankruptcy
The determining factor in leasing a car after chapter 7 bankruptcy is finding a lender who will finance you. Particularly if your previous lease was discharged in bankruptcy, lenders may view you as a higher risk than they want to take. Usually, only the larger companies will agree to finance you and you’ll ultimately pay much more than you would have before the bankruptcy.

Vehicle loans are one of the many mundane transactions that rely on your credit score to determine your creditworthiness; credit scores nosedive after a bankruptcy, whether it’s a chapter 7 or a chapter 13. Assuming you can find a lender to finance your vehicle lease, expect to pay substantially more for the:
·Interest rate
·Down payment
·Security deposit
·Vehicle insurance

Insurance companies provide the lowest rates to those customers with the best credit scores. It may not be logical, but it’s true. Drivers who have a chapter 7 bankruptcy on their credit may pay substantially more in insurance premiums than they did before their bankruptcy.

If you’ve filed chapter 7 bankruptcy and need to lease a vehicle, it’s not impossible, but it will require more effort than it would have before the bankruptcy. The following tips may help you with obtaining a vehicle lease after you’ve filed chapter 7 bankruptcy.

1. Be realistic about your circumstances. You’re much more likely to obtain a lease on an inexpensive car than on a high end vehicle. Lenders will look at your credit history before the bankruptcy, the reason(s) you filed, and your current circumstances.

You must be able to comfortably afford the lease and you must be employed or have other verifiable means by which you’ll repay the loan. Shopping at the end of the year can be advantageous since dealers will need to move their remaining inventory.

2. Compare offers from the dealers who agree to finance you. It may seem frustrating to expend considerable effort on research but it will save you money. There will be dealerships who will finance you so avoid the temptation to accept the first offer that you receive. It’s important to be patient and avoid becoming frustrated.

3. Obtain a copy of your credit report and be prepared to show it to each dealership that you visit. Each time your credit is checked it can negatively affect your credit score, so having a copy of your report can provide the dealership the information it needs while preventing further damage to your credit.

4. Sometimes you can assume a vehicle lease from another person who is unable to continue making the payments on their lease. Although this will still require approval from the lender, qualification is easier because part of the contract has already been fulfilled.

5. Be prepared to either make a down payment, have a co-signer, or both, depending on your credit score. In lieu of a down payment, some lenders will require several months payments to be made in advance.

Depending on your circumstances, you may be unable to obtain a lease that is satisfactory. If that’s the case, you can work on your credit score for a few months and then try again.

Credit repair can be accomplished fairly simply. One method is to obtain a secured credit card, make purchases each month, and then pay the balance in full before the due date. Purchases can be for everyday living items such as food, gasoline, and so forth, they needn’t be for extraneous items, but be sure to pay the balance in full each month and don’t carry a balance forward.

Vehicle leases are available to those who have filed chapter 7 bankruptcy, but they will be more expensive and may require more research than they would have prior to the bankruptcy.