Will I be able to Buy a Car After Filing for Bankruptcy?
Answer: Yes! You should be able to get an auto loan immediately after filing for bankruptcy. There are several places that offer loans to people going through a bankruptcy. The interest rates that you will receive will be steep, but financing a car after a bankruptcy is possible. Ask your knowledgeable Arizona bankruptcy specialist to recommend a source for you to receive auto financing after your bankruptcy filing in Arizona.
As a person who recently filed for bankruptcy, the real question isn’t if you’ll someday again be buying a car after your bankruptcy filing as much as it is under what terms are you willing to agree to in order to purchase a vehicle after filing for bankruptcy? According to many debtors, solicitations for car loans come shortly after people file for bankruptcy. Many people receive several offers for auto loan financing shortly after filing for bankruptcy. It’s important to remember that declaring bankruptcy doesn’t cut off all your options when it comes to buying a car after bankruptcy.
The more you know about creditors who lend to people who recently filed for bankruptcy, the better off you will be. Each lender makes their own rules on how and whom they lend money to. These rules are called “credit guidelines.” If you want to get approved at the best possible terms when buying a car, it’s important you know a car lender’s credit guidelines before you apply for credit…especially if you’re bankrupt or have recently declared bankruptcy.
Here are some things to consider when you want to buy a car right after bankruptcy in Arizona:
You have filed bankruptcy so you are now considered to have poor credit. There are a number of car dealerships that focus a percentage of their business on getting people with poor credit into a new car.
Don’t think that you need to jump at the first offer that you get. It will not be your last as many people want your business. You will likely be paying a higher interest rate or be required to put more money down when trying to purchase a car after filing for bankruptcy.
Once you receive your bankruptcy discharge, you should contact some of your local car dealers and inform them that you are ready to begin the process of buying a car after filing for bankruptcy. Be up front and honest with each of the dealers and let them know that you have received your bankruptcy discharge and that you need a car. Get an offer from each of the dealers and then compare the offers and interest rates from each of the dealers. It is important to inform the dealers that you are contacting about your bankruptcy discharge as a bankruptcy discharge tells someone that you have erased virtually all of your debts and are now probably in a better situation to pay for a car loan, as long as you have a steady source of income.
Another helpful idea when first purchasing a vehicle after bankruptcy is to simply be patient and wait. If you have recently filed for Chapter 7 or Chapter 13 bankruptcy protection in Phoenix, Tucson, or another part of Arizona it may be in your best interest to wait after filing your bankruptcy to buy a car so that you have a chance to save some money and wait until you can afford a larger down payment. Putting down 10 percent or more on a vehicle not only lowers your monthly payments but generally qualifies for more favorable rates.
Are There Benefits to Waiting to Buy a Car After I filed Bankruptcy?
Answer: Yes! The benefit to waiting to buy a car after filing for bankruptcy protection lies in your credit score. Since you have recently filed for chapter 7 bankruptcy or chapter 13 bankruptcy, your credit score will be very low immediately after your bankruptcy filing. The higher your credit score, the less the interest and fees it costs to get credit for things like car loans. If you are able to wait months or longer to purchase a car after filing for chapter 7 or chapter 13 bankruptcy, the wait will give you the chance to build up your credit score. Get your credit score up and you will get a better deal on purchasing a car after filing for bankruptcy simply by waiting, re-building your credit, and purchasing your car after your credit score has recovered some from your recent bankruptcy filing.
If you are going to wait for a period of time before buying a car after filing bankruptcy it may be helpful to talk to a trusted mechanic to see if there’s anything you can do to prolong the life of your current car. If you are without a car or your current car isn’t right, perhaps you have a friend or relative with a car you can borrow long-term until your credit score has significantly improved. If there really is no other alternative than a car loan for a new car, consult a bankruptcy attorney before you need to buy a new car and before you file for bankruptcy so you can be sure you don’t lose the new car when you do file.
If you opt to buy a car prior to filing chapter 7 or chapter 13 bankruptcy, you will find a better interest rate on your car loan as it will definitely be lower if you purchase the car before you file bankruptcy. Lenders consider those currently in bankruptcy as a higher risk and therefore, they charge higher interest rates. Please discuss this course of action with an experienced bankruptcy lawyer, debt relief specialist, or bankruptcy attorneys before either buying or not buying a car before filing for bankruptcy protection in Arizona.
At the My AZ Lawyers, PLLC, the emphasis of our bankruptcy attorneys, debt relief specialists, and bankruptcy lawyers is on customer service, attention to detail, and helping you through the entire debt relief process, be it: Chapter 7 bankruptcy, Chapter 13 bankruptcy, debt consolidation, a debt management plan, debt restructuring, or debt settlement. Our debt relief specialists have offices in Mesa, Phoenix, Tucson, Glendale and the surrounding areas of Arizona. Call us at (480) 833-8000 for Phoenix area bankruptcy lawyers and (520) 306-8729 for Tucson area bankruptcy lawyers. Set up a free consultation and free debt evaluation, meet with one of our experienced bankruptcy attorneys and discuss your situation at one of our regionally located offices or we also offer FREE Phone Consultations. To begin, schedule a free initial consultation with an experienced attorney in Tucson, Phoenix, Mesa and Glendale, Arizona.
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