Car Loans After Bankruptcy: Can You Still Get Approved?

Car Loans After Bankruptcy: Can You Still Get Approved?

Posted on February 8, 2023

Our car loans team has put together some important advice to follow when trying to get a car loan afterbankruptcy.

Legally, you cannot open up any new credit accounts until you are discharged from bankruptcy. So, until you receive the official discharge from your trustee, there is nothing we can do.

Once you have received the discharge from your bankruptcy trustee, it is time to get cracking on rebuilding your credit.

Open secured credit card accounts with a few different banks

These secured cards work like conventional credit cards, but you need to deposit money into the account in order for the cards to work.

Do not confuse these cards with pre-paid credit cards.

When you open a secured credit card, it reports your financial activity to Equifax and TransUnion. It will not erase the bankruptcy from your record, but it will help you start rebuilding your credit score.

The bankruptcy will stay on your credit report for up to seven years, but there are some lenders who will give you a car loan after bankruptcy, but you will need to find them.

Before you start looking for these lenders, it would be smart to take a few minutes and begin working out your budget.

Budgeting is something you would have covered with your bankruptcy trustee as part of the required financial literacy.

The bankruptcy would have wiped out all of your debt and you have been living purely on your income, so you should have room in your budget that can be put towards a car payment.

If you are not sure how much of a car payment you can afford, take all of your income, then add up your debt subtract the debts from your income.

Whatever remains is what you can put towards a car payment.

When you are calculating your car buying budget, you also need to allocate funds for insurance, maintenance and fuel. Fuel prices are rising fast, so you must keep additional room in your budget to cover it.

How to find lenders who work with people who were discharged from bankruptcy

If you do a search online, you would have a long list of websites that offer car loans, but you don’t know whether they can actually get you approved for a loan. You don’t want to waste time speaking with people who cannot get the job done.

You should find car dealerships that work with credit-challenged borrowers. There are lenders who will give you a car loan on the same day your bankruptcy is discharged, but you won’t find these lenders online; you have to go through a dealership.

If you went through a website, there is no one to help you navigate all of the different loan options. The dealership is going to help you every step of the way and also show you how to rebuild your credit.

Bankruptcy could happen to any one of us, now that you know how to get a car loan in Vineland after going bankrupt, you can start living your best life.

We’d love to help you find the perfect car loan after bankruptcy. Simply fill in the form below and we’ll get back to you ASAP! 

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