Bankruptcy offers a fresh financial start for many individuals who are drowning in debt. However, you may have questions about what is possible after your filing is complete.
For many, being able to purchase a car is important. However, after filing for bankruptcy, will this even be possible?
Buying a car after bankruptcy
In some situations, the debts lifted by filing bankruptcy may make it easy to pay cash for a car or keep up with loan payments. Also, many auto lenders will work with individuals who have filed for bankruptcy. Just note that if you go this route, you will have higher interest rates than someone who has not filed.
After filing for bankruptcy, how long do you have to wait to purchase a car?
The impact of filing for bankruptcy will be seen on your credit report for seven to 10 years. The good news is that you won’t have to wait that long to receive a loan and borrow money. Each year, the impact reduces, and some people can get a car loan within six months of finalizing their bankruptcy.
In reality, bankruptcy makes you a better risk for a car loan. Someone whose debts have been wiped clean has more monthly funds available to pay a car note than someone who is mired in credit card debts. You may have to pay a higher interest rate than you’d like, but even that goes down the longer you wait after your bankruptcy before making the purchase.
Know your options and rights
It can be scary to file for bankruptcy, especially when you start thinking about the things you may need to finance in the future. Rest assured, bankruptcy usually makes it easier — not harder — in the long run to get the things you have to have. Experienced legal guidance can help you best understand all of the debt relief options you have.