Buying a Car after Chapter 7 Bankruptcy Discharge

Purchasing a Car after Bankruptcy

Purchasing a car after bankruptcy is easier when you have the right information. Whether you are currently going though bankruptcy and need to buy a car for your transportation needs, or have already been declared bankrupt, this information will help you to achieve your objectives.

Why do People File for Bankruptcy?

Several people apply for bankruptcy or try to get an IVA when they are having severe debt problems. However neither of these options is as painless as they may appear. The record of your bankruptcy will stay with your credit file for at least five years and be available to anyone who you may need to get a loan from for up to ten years.

Most people with poor credit still have several options for getting loans. Some banks make it harder for people who have filed for bankruptcy to get accounts and trying to get a loan after bankruptcy is even more difficult. This is why you should ensure that you learn all you can before applying for a loan to buy a car.

Purchasing a Car after Bankruptcy- Save the Money You Have

If you have just been declared bankrupt, some financial advisors recommend that you immediately stop making car payments and save the money. You can use the money to help pay for a much cheaper car that can get you to work and other places. This advice is given on the basis that most car dealers don’t repossess vehicles until the drivers are behind in their payments for at least two months.

Purchasing a Car after Bankruptcy- Be Careful When You Get a Car Loan

It’s not impossible to get a car loan after bankruptcy. There are several lenders who specifically target individuals who have filed for bankruptcy. However, some of them charge exorbitant interest rates and fees for their services. This makes it difficult to pay back the money you borrow and it makes it more likely that you will end up in problems, thereby negatively impacting your credit.

Buying another car using a loan and steadily paying back the money you have borrowed, allows you to build your credit back up again. You will be more likely to make each payment on time and in full if you get the lowest interest rate and the lowest fees possible. Shop around for a good loan before you make a final decision. Purchasing a car after bankruptcy can help you to build back good credit if you do it wisely.