Can I Buy A Car After My Bankruptcy?
The decision to file for bankruptcy can be a hard one to make in the first place. Borrowers who have declared bankruptcy in order to try to improve their financial situation then must face intense scrutiny in hopes that their debt will be discharged while also likely dealing with ongoing financial challenges. The good news is that once you receive your bankruptcy discharge, you can begin building your credit back up by taking on new loans as it is appropriate and necessary to do so.
However, many Americans need a working vehicle in order to be able to work and earn funds to support themselves. According to statistics published by the U.S. Census Bureau, approximately 86 percent of all workers commuted to work by private car in 2013. Because of how essential having a working vehicle can be, a car purchase may not be something you can hold off on. Here are some things you should consider about purchasing a car if you have already filed or are thinking about filing for bankruptcy.
Purchasing a Car After Bankruptcy
It may be the best option to avoid incurring any debt altogether by simply paying for the car outright upfront in cash. You may be able to accomplish this by:
- Using freed income due to discharged debts to pay;
- Looking at used and secondhand cars instead of trying to buy new; or
- Asking to borrow any gaps in funds from willing friends or family.
However, the reality is that purchasing a car with cash just isn’t an option for many people regardless of whether they have ever filed for bankruptcy. On average, Americans take out approximately $56 billion across 2.3 million new auto loans each month. Financing is something that many of us have to turn to when we purchase a vehicle, and many lenders are still willing to finance auto loans for borrowers who have filed for bankruptcy. You can still expect to be subjected to higher interest rates on your auto loan and the car buying process may take a bit longer to go through than it would otherwise. When trying to find a new car loan after filing for bankruptcy, you should:
- Keep a close eye on your credit score
- Shop around for the best terms and conditions
- Try to wait until your debts have been discharged and your bankruptcy case has been closed to move forward
- Even then, consider waiting several months (and working on continuing to repair your credit score) before applying for a large car loan
We Can Help You Plan Effectively
If you are in serious financial debt, it is essential to understand all of your options so that you have the information you need to make an informed decision. The best way to accomplish this is to turn to an experienced bankruptcy attorney who can discuss all viable solutions with you. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, we are dedicated to helping overwhelmed borrowers escape crippling debt and move forward into a brighter financial situation. We have a genuine desire to see each of our clients end up in a better position than where they began pre-bankruptcy and you can depend on us to support you with this same passion. For more information on how the bankruptcy process works in Florida, contact us today.