A Family-Owned, Family-Focused Bankruptcy Firm

3 Ways to Buy a Car After Bankruptcy

| Oct 12, 2018 | Uncategorized

Bankruptcy can be a life saver after years of financial insecurity. Once you receive your discharge, the thought of moving on to a new life free from debt is exciting. However, you may worry that you will not be able to purchase some items you may need,especially if you’re looking for a car. If you hope to purchase another vehicle after bankruptcy, know that you can definitely make it happen – you just may need to get creative. Bankruptcy can make getting a car loan a little more complicated,especially if you’re want to be cautious with your newly bright financial future. The following are some ways you can get another car after bankruptcy.

Save and Buy Used

When you want to gate new car, you need to think about your current credit score. After bankruptcy, some people’s credit scores go down,and other’s credit score rises. Make sure that you know your new score after bankruptcy so you know what kind of loans you qualify for – if your score is too low, you may not be able to get a good deal for a new car and will pay too much interest on the loan. One of the best ways to get a new car is to not get a new car a tall. The used car market is really great in most cases. You can buy almost-new cars with low mileage for far less money than a new car costs. Because used cars are more affordable, you will be able to save up the money you need for the car you want. This process takes longer than simply getting a loan at a bank, but you will own your vehicle out right and will never have to worry about repossession. You will also save a lot of money by not having to pay interest fees.

Work on Your Credit

If you do not have time to save cash for another car and you don’t want to rely on a high-interest loan, you can speed up the likelihood of a loan approval through rebuilding your credit. For example, you can try to apply for a credit card. At this point,a word of caution is necessary. The credit card is solely for the purpose of credit building. If credit card debt is what led to your bankruptcy, make sure you know exactly how to avoid your past mistakes. Choose a card with a low credit limit and utilize it thoughtfully. To rebuild your credit using a credit card, you can start to make small purchases on it each week. For instance, instead of using cash or your debit card to pay for gas or groceries, use your credit card. The same week or month, you can pay the balance off in full using money you were already going to spend on those items. After a while, creditors will see that you are doing well in paying your debt off. You will eventually qualify for more credit and ultimately better car loans. The process can take some time, but this is one of the fastest ways to rebuild your credit after a bankruptcy. Once you have rebuilt your credit, you can then try to apply for a car loan and purchase a new vehicle

Reaffirm Your Car

If you cannot live without your car and you know you will be able to pay your monthly loan payment, you may have the option to reaffirm your car loan during bankruptcy. This simply means that you make the agreement to continue payments on your car instead of getting rid of the loan in bankruptcy. To reaffirm the car loan, you will have to sign a new contract with the dealership. However, the new agreement will be on the terms of the loan you have currently. You have to be able to make the payments just as you did before. Otherwise, the dealership will take the car back. You will also face a lawsuit for the amount owed on the car. If you have other questions about bankruptcy, please contact us at Phoenix Law.