If you file Bankruptcy before you attempt to get a loan, you might not be approved.

Answer Applies to: Washington
Replied: 1/18/2012

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Yes, file bankruptcy first. You'll be surprised by how easy it is to buy a car after you file. In fact, you get deluged with offers from local car dealers who are more than willing to sell you a car after you file bankruptcy.

Answer Applies to: Colorado
Replied: 12/21/2011

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If you are considering a new loan, filing for bankruptcy will hurt your chances of getting that loan. While many people are able to get secured debt loans after bankruptcy, it usually takes some time to rebuild your credit after bankruptcy.

Answer Applies to: North Carolina
Replied: 12/20/2011

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Either way you interest rate will be high. Don't get a car that is too expensive. Get something you can afford without having to worry about the payment each month.

Answer Applies to: California
Replied: 12/19/2011

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Your options are limited. You can try to buy something now or try to buy something later. Sometimes it works better to do it one way and sometimes it pays to do it later. I'd go car shopping now and see what happens. The worst that can happen is that they tell you NO.

Answer Applies to: Texas
Replied: 12/19/2011

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It depends on what your debt to income ratio is and your credit scores is. You cannot go in debt more than $1000 while you are in bankruptcy. So it also depends on the type of bankruptcy you are filing. Many people are able to obtain car financing while in a Ch 13, no one can while in a ch 7, but that is for only 4 months. You should be able to get a new car after a Ch 7, but it will be a higher interest rate than for a person with good credit and no bankruptcy. Good luck!

Answer Applies to: Michigan
Replied: 12/19/2011

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By discharging existing debts, bankruptcy usually puts on in a better position to obtain new extensions of credit, particularly if you have a steady and reliable source of income.

Answer Applies to: Indiana
Replied: 12/18/2011

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After the financial cataclysm of the past few years, banks are demanding near-perfect credit from borrowers. Auto financiers and dealerships are not as strict , but still examine credit scores - also known as FICO scores - to determine if you are a good credit risk. Your FICO score is composed of the ratio of your monthly income to monthly debt service, and your record of payments to other creditors. So just because you have a lot of debt, that does not mean your score is low. As long as you have high income, job security, serviced all your debts in the past, and will be able to service future debt (including the new car loan), you can still get the vehicle financed. A bankruptcy discharge can help in situations like yours by eliminating competing debt that could interfere with your ability to pay the new car loan. To find out if filing bankruptcy in order to eliminate competing debts would make you more attractive to your prospective lender, talk to the dealer or lender representative and follow up with a bankruptcy attorney in your area.

Answer Applies to: Illinois
Replied: 12/17/2011

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Contrary to what you may believe, bankruptcy can actually improve your credit score. The answer to your questions depends on how much and what kind of debt you are currently carrying. You should consult a bankruptcy attorney to further discuss.

Answer Applies to: Maryland
Replied: 12/17/2011

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Once your debt is gone, you should be able to get a car loan without too many problems. You can not file another chapter 7 for 8 more years, therefore the creditors look at you like you are a good credit risk.

Answer Applies to: New York
Replied: 12/17/2011

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You should check with a local car dealer. You would be surprised at financing available regardless of your financial circumstances. You will likely pay a very high interest rate regardless of when you file. I just had a client purchase a car shortly before filing her bankruptcy and she paid 17% interest on the loan. There are options to purchase a car during a bankruptcy but the interest rate is 25%. After bankruptcy you will still pay a higher interest rate, but most car dealerships will work with you to obtain a loan. You may have to get a less expensive car to make up the difference for the higher interest rate and stay within your budget. You should consult a bankruptcy attorney to see what your best option is and how the purchase will affect a bankruptcy.

Answer Applies to: Wisconsin
Replied: 12/17/2011

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Only the lender can tell you if you qualify for a vehicle loan. If you do not qualify now, your credit can repair after your bankruptcy filing so that you will be able to purchase another vehicle in a reasonable period of time. The amount of time depends on your actions, if you pay everything on time after the filing, and other issues which do increase your credit fico score.

Answer Applies to: Florida
Replied: 12/16/2011

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If you get a loan and immediately file bankruptcy, that's fraud and will generally have very bad consquences. If you have a lot of debt and need to file bankruptcy, how do you expect to repay a loan anyway.

Answer Applies to: Georgia
Replied: 12/16/2011

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You might want to see if you can take out a loan now. No sense in filing if you can get a loan. Also, once you file you will have bad credit and it will be hard to get a loan and the interest rate will be high. If you cannot get a loan now, then you could consider a bankruptcy filing but I would try and get a loan first.

Answer Applies to: California
Replied: 12/16/2011

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You just outlined two of your options. Each lender has their own requirements to grant credit and you won't know what they are unless you ask them. Locate some dealers and go in and talk to them about financing. Keep the vehicle inexpensive and you will have more luck.

Answer Applies to: Utah
Replied: 12/16/2011

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You are correct that having excessive debt can hinder your ability to obtain an automobile loan. If you are granted a bankruptcy discharge then your unsecured debt will be eliminated, helping to improve your credit standing. However, you may need to wait a period of time for the bankruptcy to age in order for your score to rehabilitate sufficiently. If you apply for a loan shortly after filing for bankruptcy, you might only qualify with subprime lenders offering high interest rates, which can possibly land you in the same predicament you are in now. You should meet with an attorney to help determine the best way to proceed.

Answer Applies to: New York
Replied: 12/16/2011

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