Buying a Car After Bankruptcy

Chapter 7 bankruptcy can be a useful tool for resourceful people who find themselves in financial “hot water”. It is a means for clearing a large amount of consumer debts which can truly lower quality of life. chapter 7 bankruptcy should not be viewed as a complete negative. Although it does leave a mark on your credit, it can also give you a better financial situation.

A common concern after declaring chapter 7 bankruptcy is how to rebuild one’s life. This includes items like homes and credit. But the focus of this particular blog post will be how to go about purchasing a car after a bankruptcy case has concluded. In many cases, individuals who have declared chapter 7 bankruptcy will need a “co-signer” on things such as credit applications. However, there are certain ways to go about purchasing a car.

Re-Establish Credit

How to get a credit card has been the topic of other blogs featured on this site. Re-establishing credit can demonstrate to a dealer or lender that an individual is able to make regular payments on time. There are research banks and financial institutions that are willing to work with people who are in the post-bankruptcy phase. Some options include undertaking an unsecured credit card or even a secure credit card that maintains strict limits. It is important to re-visit your credit reports after acquiring one of these cards to be sure that the credit line is showing up (lenders will check for this too!)

Using a credit card regularly, and always paying off the full amount at the end of the billing cycle effectively builds credit. Once one card is going smoothly, you can apply for another and continue to grow your credit.

Finding a Dealer

Once your credit has been built up to a sufficient level, it is time to begin researching dealerships that would be willing to work with you. With a newly built up credit, it is possible to find dealers who accept your post-bankruptcy situation. Some even advertise that they are willing to work with individuals in a post-bankruptcy phase. This just means research on which dealership suits you best but, it is possible to purchase a car after bankruptcy (as long as you are careful with credit lines!)

Following these steps should help get you on your way towards buying your first car post bankruptcy.