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Even after bankruptcy, you can still buy a car using cash or credit. No matter your situation, there should be an option that works for you. As long as you wait until you receive your bankruptcy discharge – or until your bankruptcy case is dismissed – you can get back on the road in no time at all.
Buying a Car with Cash
Many people are better off financially after bankruptcy. Without unmanageable loan payments and wage withholdings, you may find you have more disposable income than you did before. If you want to buy a car with cash, you should save your extra money until you have enough to buy it, outright.
This can be a great option because you won’t have to take out any loans or worry about high interest rates, and the car will be yours right away.
Buying a Car with Credit
You may be eager to re-establish your credit after bankruptcy, and lenders will be excited to extend new credit. Although financing a car after bankruptcy can help you rebuild your credit, you will likely face high interest rates.
If you need a car immediately, however, financing may be your only option. Still, you should not accept the first loan you are offered. Explore your options with banks and credit unions and fight for a fair interest rate from the car dealer. Your chances of getting a reasonable interest rate are better if you have a steady source of income, and if the credit union gives you a more favorable interest rate than the dealer, you can use this to negotiate.
Whatever you do, do not take on more debt than you can handle. If a 29% interest rate is unmanageable, explore other lenders and options.
Can I Buy a Car During Bankruptcy?
If you need to buy a car during bankruptcy, the rules depend on what kind of bankruptcy you filed. In a Chapter 7 case, you will need to wait until you get your discharge notice from the bankruptcy court. You should receive this notice about 90 days after your 341 hearing.
In Chapter 13 cases, the rules are different because your wage earner’s plan will last for 3 to 5 years. If you want to buy a car during Chapter 13 bankruptcy, you will need to ask the bankruptcy court for permission by filing a motion with the court.
If you need to file any kind of motion in bankruptcy court, you should speak to an attorney first.
Fortunately, you’re already in touch with Busch, Reed, Jones & Leeper, P.C., a local bankruptcy firm with more than 150 years of combined professional experience.
To discuss your bankruptcy case during a consultation, simply call us at (770) 629-0154 or contact us online today.
We look forward to helping you achieve your goals before, during, and after bankruptcy.