If you have gone through years of financial insecurity, bankruptcy can seem like a lifesaver. After you file for Chapter 13 bankruptcy, you may feel like you have a new life.
In your new life, you may someday have the need to purchase a vehicle. Many who have gone through bankruptcy will tell you this is not always an easy task if you have to apply for financing. However, you can get creative and explore some alternatives in order to buy a car after you have gone through bankruptcy. Here are some ideas:
Buy Used with Cash
One of the easiest ways to purchase a car without being concerned about financing is to save the money and purchase a less expensive used car. After going through a bankruptcy, it may take some time before your credit repairs and you can get traditional financing.
Saving enough money to purchase a vehicle may seem like a daunting task. Instead of looking at one large number, break the amount you want to save into smaller chunks that you can easily save. Act as if you are making a regular car payment, but deposit the money into a special bank account meant specifically for buying your car. Before too long, you will have enough money to purchase a nice used car with cash.
Wait for Your Credit to Rebuild
If you cannot save the extra cash in a bank account for a car, you can instead wait out the time until your credit is better. You can do some things to help increase your credit a little faster, though keep in mind that there is no way to know how fast your credit will improve.
Be sure to make all of your bill payments on time, including your utilities and your mortgage or lease if you still have these contracts after your bankruptcy. After your credit has improved, you can then try to apply for financing for a vehicle.
Apply During Chapter 13 Bankruptcy
You may find a lender who will give you a loan during your bankruptcy filing. You have to approach the bankruptcy court to move forward with the loan. For the court to approve the loan, you have to get pre-approved from the lender and show the court documentation with your interest rate, the amount of the loan, and the payment amount each month. You will also have to change your bankruptcy to reflect the new loan. In addition, you have to provide information on the car you want to purchase, including the make and model.