Can I Buy a Car After Filing for Bankruptcy?
Declaring bankruptcy is a big decision — but it may be the right one. Once you move past the painful initial stage of admitting your debt is unmanageable, you can start thinking about the future. However, you may have questions about buying a car after bankruptcy.
The good news is that it is possible to buy a car after filing for bankruptcy. However, your options may differ depending on your specific type of bankruptcy case, how long it has been since you filed, and why you need the car.
The attorneys at Sasser Law Firm offer free consultations to discuss bankruptcy options.
Can You Buy a Car After Declaring Bankruptcy?
Auto dealers and lenders do not necessarily exclude buyers who have declared bankruptcy in the past.
However, your car buying experience may be different for some time after you file a bankruptcy case. You may pay higher interest rates as is the case for anyone with negative information on their credit report.
Do I Have to Wait to Buy a Car After Filing for Bankruptcy?
You do not have to wait to buy a car after you declare bankruptcy. However, you should be aware that bankruptcy can affect the terms of any loan you take out.
Fortunately, these impediments decrease over time. Your credit score will be less impacted as the years go by. It is very advisable to establish and use a few consumer credit accounts after a case is filed so as to help rebuild your credit score.
How Should I Pay for a Car After My Bankruptcy Discharge?
Once you have discharged your debt through bankruptcy, you can purchase a car however you want. But even if your credit score has recovered, paying with cash may be preferable if that is financially possible. If you do choose to finance the purchase then those payments will help to rebuild your credit score.
Possible restrictions on financing a vehicle
In chapter 7 bankruptcy a debtor would not want to use bankruptcy estate property (e.g. a trade-in vehicle or cash) as part of the purchase transaction. That bankruptcy estate property should be abandoned prior to when it is used for the purchase.
In chapter 13 bankruptcy there may be restrictions that apply to the purchase. You should consult with your attorney prior to proceeding. In the Eastern District of North Carolina, a chapter 13 debtor is required to obtain a court order if they wish to incur debt or make a purchase in excess of $10,000.00.
Got Questions Regarding Bankruptcy? Talk to Our Bankruptcy Attorneys in Cary, NC Now
If you are considering filing for bankruptcy, get in touch with Sasser Law Firm. Our attorneys may be able to assist you. Consultations are free.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
