After filing for bankruptcy, it almost feels like all big purchases are off limits. After all, your finances just underwent an intense amount of scrutiny and passed through the ringer, so to speak. While bankruptcy can make it more difficult to purchase items such as a car or a home, it's certainly not impossible.
Chapter 13 bankruptcy is unique in that you commit to a repayment plan. The specifics of your plan, including the amount you'll pay and the overhaul timeframe, aren't the same for everybody, so your financial future could look a little different than someone else's.
There are two options to purchasing a vehicle after Chapter 13:
- Wait for your bankruptcy discharge which doesn't occur until the end of your repayment plan
- Request court permission to take out a car loan before your discharge
The first option may take longer, but the second one can be infinitely more difficult. Many lenders are hesitant to give you a car loan if they know you just filed for bankruptcy and there are companies just looking to scam you out of your money.
How do I find a car loan lender?
Review the options at your own bank first. If they're unwilling to lend to you, it's time to do your research. An attorney can simplify the process for you and may be able to recommend a trusted lender. You should also research your options thoroughly before signing any papers; the last thing you want is more financial trouble.
Be aware of guaranteed loans despite credit scores, wire transfer requests, and requests for fees right when you sign up. You can also check with the Better Business Bureau for further verification.
After you have a car loan lender, it's time to obtain approval from the bankruptcy court. They will assess your bankruptcy income, the amount of the loan you're applying for, and whether you have the means to pay that loan back over time. The motion you file with the court will go further into detail regarding your loan and the car you wish to purchase.
Life after bankruptcy can be intimidating, especially when you have plans to commit to a large purchase. The Bankruptcy Law Firm has the resources to make this process as seamless as possible. Not only have we been named as one of the Top 100 Firms by the Debt Education and Certification Foundation, we offer legal counsel in English, Vietnamese, Spanish, and Greek.
Call our Oakland bankruptcy lawyers today to receive award-winning legal counsel while purchasing your post-bankruptcy vehicle!