Buy a Car After Bankruptcy

1Wait for your debts to be discharged. Although you can still make a purchase even if your bankruptcy case hasn't been resolved, it's still best to wait until your discharge has been filed so that your dischargable debts can be cleared on your credit report.

2Talk about your situation. It's okay to tell the dealership about your financial situation. Most are willing to work with you to find a reliable car with financing you can afford. Many also have programs intended to help you get an auto loan while repairing bad credit.

3Seek a co-signer. Getting a trusted friend or family member to co-sign a loan can get you better financing, and shows the lender that you're less of a risk.

4Be conscious of all the costs of buying. Shopping for a car during or after bankruptcy requires some serious shopping savvy. The less expensive your car is, the less financing you'll need. Not only should you be looking for feasible sticker prices, but you should consider the cost of maintenance and repairs on older used cars. Late model used vehicles tend to be the better buys because they don't usually need as much upkeep.

5Begin the process of re-establishing your credit. Picking up your life after bankruptcy includes rebuilding your credit. One critical component to credit repair is making sure you pay the full amount of your car payments on time every time. Not only does this show that you are responsible for making your payments, but you'll be rewarded with cheaper rates in the future.

6Refinance your car loan as your credit improves. As you start rebuilding your credit, your car loan rate can also improve substantially and it is recommended to refinance every six to twelve months.