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Buying a Car After Bankruptcy

While bankruptcy offers an opportunity for many consumers in debt to start their financial lives anew, it may result in temporary financial uncertainty. After filing for bankruptcy, some people wonder how cautious they need to be in their future purchasing decisions.

One of the primary sources of concern for post-bankruptcy consumers is how to go about purchasing a car. The bankruptcy process may have freed them of their debts, but life after a bankruptcy may follow a different script.

To buy a car after filing, you'll likely need to take care of your credit. But the good news is that, with time, many people are able to build their credit up to higher levels than before their filing.

To get answers on how bankruptcy may affect your debt and about life after bankruptcy, speak with a local attorney for free when you complete the form on this page.

Post-Bankruptcy Financial Life

After filing for bankruptcy, many people are nervous that their financial life will never be the same. What happens after bankruptcy depends in part on whether you've filed for Chapter 7 or a Chapter 13 bankruptcy.

While a bankruptcy can appear on your credit report for up to 10 years, by eliminating debt through bankruptcy, bankruptcy filers have an opportunity to begin rebuilding their credit.  Here are a few steps people can take to rebuild credit after they file:

  • Control spending by making a set budget every month. Don't spend more than you make!
  • Start a savings plan with a local bank. Set aside some money each month to build a healthy fund for emergencies.
  • Restore credit by paying utility, credit card, and mortgage bills on time.

If you decide to buy a new or used car after filing for bankruptcy, keep in mind the following tips:

  • Don't pay more than you can afford. Set a reasonable budget limit for your monthly payments before you go shopping, and stick to it no matter how persuasive the salesman may be.
  • Make sure to make your car loan payments on time every month, with no exceptions! This is best achieved by purchasing a car that you know you'll be able to afford.
  • Consider buying a used car before splurging for a new model.

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