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Will I Be Able To Buy A Car After Bankruptcy?

One of the biggest myths about declaring bankruptcy is that it will ruin your credit forever - and that you will spend the rest of your life after bankruptcy renting an apartment and taking the bus, never regaining power over your finances and never returning your life to normalcy. However, this is simply not the case. It is possible to rebuild your credit in the wake of a bankruptcy. In fact, in many instances, you can rebuild your credit much more quickly than it takes for your bankruptcy filing to fall off of your financial records.

Many people find that if they make the right choices in the months after their bankruptcy has been discharged, they will be able to buy a car within a year or two. The first and most important step is to begin to reestablish your credit immediately by paying your bills on time, by using a credit card wisely, and even by taking out a small loan.

The next step is finding the right car for you. Don't buy more car than you need - and certainly don't buy more care than you can afford. Remember that making timely payments on your car will help you raise your credit score. The larger a down payment you can make on your car the better - it will make your monthly car loan payment smaller.

Finally, refinance your car loan after about a year. If you are building your credit score, you should be able to secure a lower interest rate and lower your monthly payments at this time.

Buying a car soon after a bankruptcy can be a bit more expensive and a bit more difficult - but it is certainly not impossible. Buying a car would certainly be more difficult if you were still drowning in debt before bankruptcy, in a situation where your credit score would be harder to improve.

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