FAQ: How to Eliminate Medical Bill Debt Via Bankruptcy

Can I buy a car after filing for bankruptcy?

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 other benefits to waiting to buy a car after you have filed for bankruptcy? Yes! The issue in waiting is your credit score. Since you have recently filed for bankruptcy, your credit score will be very low immediately after 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 buy a car after bankruptcy, you have 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.

At the Bornmann Law Group, our emphasis is on customer service and helping you through the entire bankruptcy filing process. We have offices in Phoenix, Tucson and the surrounding areas of Arizona. Call us at (480) 263-1699 and discuss your situation with an Arizona bankruptcy lawyer regionally located near you, be it in Tucson, Phoenix or another region. To begin, schedule a free initial consultation with an experienced attorney in Tucson, Phoenix and Flagstaff Arizona.

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