Buying a Car after Bankruptcy

Personal bankruptcy is meant as a way to help people manage debt that has become overwhelming.  This can happen for so many different reasons.  In the aftermath of filing for bankruptcy, most individuals are required to go through classes on managing finances, and most people work hard to never enter bankruptcy again.  Although it is possible to file more than once in your life, it is inadvisable and most people avoid it.

While bankruptcy offers protection in some ways, it can also make it difficult to move on with your life post-bankruptcy.  Imagine that you’ve followed all the requirements of bankruptcy, worked steadily, and lived within your means.  You get a new, higher-paying job, but would need a car for your commute because it’s further away and not within reach of public transportation.  You have some money saved for a down payment but need a loan.  You may worry — will it be possible?  Will the interest rate be outrageous?

While it is true that there are ways that bankruptcy can make it harder for you to get good loans on large purchases, there is hope.  Try the following steps if you are interested in purchasing a vehicle post-bankruptcy:

• Stay on top of your finances — have a budget and stick to it
• Be realistic about how much car you can afford
• Save up for as long as possible for that down payment
• Know your credit score and do what you can to improve it
• Be upfront with lenders and bring information showing you have managed your finances well for years

No matter what, don’t get yourself into a bad loan.  Keep looking until you find one that fits your financial situation.

Bankruptcy has pros and cons.  If you are overwhelmed by debt and are considering filing for bankruptcy, contact an experienced attorney to learn more about benefits and drawbacks of bankruptcy.