How to Buy a Car After Bankruptcy
- August 28, 2018
- By: Greenpath Financial Wellness
Featuring Sarah Teets, Senior Client Advocate
Bankruptcy gives some time and breathing room to pay off debts, or it may expunge those debts altogether. But bankruptcy is not a financial Get out of Jail Free card. It has consequences, and one consequence is that it will make it more difficult—and more expensive—to get a new loan for a big-ticket item such as a car. Happily, you can recover from bankruptcy, rebuild your credit, and rejoin the economic mainstream. So how can you buy a car after bankruptcy?
Buying a vehicle makes sense after bankruptcy if you treat it as a tool to improve your financial situation. Buying a car after bankruptcy makes no sense at all if it causes you to overextend your finances by putting you in a situation where making your loan payments is a struggle—or worse. Buying a vehicle that is too expensive or buying one too soon after bankruptcy won’t help you, and it could send you hurtling back over the financial abyss. But by very carefully obtaining an auto loan with terms you can handle, you can begin to re-establish your creditworthiness. “If someone [after bankruptcy] can be approved for a car loan and makes the payments on time every month, the loan will help them re-establish credit,” Sarah Teets, a senior client advocate at credit-counseling firm GreenPath Financial Wellness, told C/D.