Can I Buy a Car After Bankruptcy?

While Philadelphia is blessed with a pretty good Walk Score at 79, most of our bankruptcy clients find they both need and want to have a car. And while some people walk out of bankruptcy declaring they will never sign on to get another car payment ever again, preferring to get a cheap used car if they have to, others find it’s still more realistic, and less nerve wracking, to seek a new car loan for a sensible car as soon as it makes sense to do so.

And the fear of never being able to get a car loan ever again certainly gives many of our clients a great deal of pause.

Fortunately, there’s not much to worry about. People get car loans after bankruptcy all the time. Many of our customers start getting car loan offers a few weeks after their discharges.

Granted, you might not want to take the first offer that comes along. The early offers will be subprime offers carrying high interest rates and unfavorable terms. According to, customers do better when they rebuild their credit for about six months before seeking a new car loan. Obviously, the higher you can get your credit score before you try, the better off you’ll be. Your credit score will go up after bankruptcy anyway, but it may be wise to let it get even better before you try to make your move.

Once you do start looking, try a hometown bank or a credit union. Don’t have one while you’re going bankrupt? Consider starting a checking account with one of them after. Banks that give you a chance at a personal relationship with a banker may be more inclined to work with you, and credit unions often give better loan terms anyway.

We don’t recommend ‘buy here, pay here’ bad credit lots. They tend to have the worst conditions of all, outfit all their cars with those little devices that can shut the car off if you don’t pay, and tend to sell cars that are really suspect. Worse, they might demand really high down payments. If you have to put $2000 down to buy a bad used car, you might as well just buy a bad used car for $2000, save another $2000 and trade it in for a better model later. This is certainly the method financial coach Dave Ramsey recommends, and if you’re not making much more money than you did before you went into bankruptcy it’s probably one that’s well worth considering.

And, of course, if you entered bankruptcy to save your car in the first place, this might not even be an issue right away! Here at Sadek and Cooper we help people keep their homes and cars while going through a bankruptcy, and we do it every single day.

Ready to find out what your life might look like during and after bankruptcy? Schedule your free consultation to find out if a fresh financial start is right for you.


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