Financing a Car

As you continue to improve your credit score after your bankruptcy has been discharged, you may consider buying a new or used vehicle for both practical and credit-improvement purposes. Making regular payments on a financed vehicle is one way to improve your credit score over the long term. However, qualifying for financing can prove challenging after bankruptcy. If you are making payments on a car before you file for bankruptcy, it may make more sense to continue making payments on that vehicle, rather than attempting to qualify for new financing down the line.

By reaffirming a debt in a Chapter 7 bankruptcy case, you can continue to make payments on the debt, including vehicle financing. As long as you can remain current on the payments, you will be able to keep your vehicle, regardless of your bankruptcy status. If you are filing for a Chapter 13 bankruptcy, you may be able to get even more concessions, such as loan modifications by the bankruptcy judge, to make your car payments more affordable.

However, if you cannot afford to make payments at the time of your bankruptcy, and you have to return your vehicle, purchasing a new vehicle after the bankruptcy is discharged and you are more financially stable may be an option. Your best option in this instance is to work with your bank to get preapproved for a car loan. In this way, you will have more negotiating power when you walk into the dealership. You should also plan to save up - having a sizable down payment available can get you better interest rates, and more favorable options as well.

Getting financed for a new car after bankruptcy can be challenging, but not impossible. Be prepared to take the extra steps necessary to show that you are a good credit risk, and don't be afraid to shop around. Not every dealer will be able to offer you the best price or options, so take your time in your search. Lastly, don't fall for special dealer advertising designed for those who have poor credit - you'll almost always end up paying more than the car is worth.

Our expert Los Angeles County Bankruptcy Law Firm is willing to discuss all aspects of the bankruptcy process with you, including the concerns you may have regarding vehicle financing after yourLos Angeles County bankruptcy. Contact us today and speak with one of our Los Angeles County Bankruptcy Lawyers about your particular needs. We offer a free initial case evaluation that can help you to better understand how bankruptcy benefits your financial situation, and how financing a car can be possible after your bankruptcy has been discharged.