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Buying a Car Following a Bankruptcy Filing

How much can you afford for a carThe number of bankruptcy filings has been falling consistently over the last 5 years as the U.S. economy has begun to recover from the Great Recession but there were still almost 900,000 non-business filings in 2015. Most of those filings were not because of reckless spending but, rather, due to financial hardships and unexpected circumstances. Filing for bankruptcy can be stressful and, to some, quite embarrassing or disgracing. It’s never something someone expects or wants to go through but it does happen and it can either be extremely beneficial to your future or not, depending on the choices you make following the bankruptcy.

Beyond the obvious need to identify the reason why you got to the place you were that required you to file and the steps you should take to avoid that from happening again, you will need to readjust your decisions to meet your current situation. Following a Chapter 7 bankruptcy, for instance, you may have given up all or most of your assets, such as any vehicles you may have owned or been still paying on. If you didn’t sign a reaffirmation agreement for your car loan then the vehicle would be returned to the lien holder and the debt would be taken off of your record. In fact, with Chapter 7, most of your debt would be removed completely, causing your credit report to show that you have little-to-no debt whatsoever.

If you lost your vehicle during the bankruptcy then you likely want to find a way to replace it or find some form of transportation. In the case that most or all of your debt was removed, you now have a unique opportunity. Without any other debt, it will be much easier for you to get approved for a new car loan, provided that you can show proof of income. Lenders are usually happy to approve a car loan to someone following a bankruptcy because they know that you no longer have other creditors to worry about. So, now the question is, should you buy a car following a bankruptcy or should you wait and save money to purchase one outright in order to prevent another financial problem down the road?

The Benefits of Buying After a Bankruptcy

As stated above, you may be able to get approval on a car loan following a bankruptcy despite having low or bad credit. Buying a car directly following a bankruptcy can be beneficial. First of all, if you lost your means of transportation in bankruptcy then a new car will fill that need. Additionally, since the bankruptcy has damaged your credit, you likely want to begin rebuilding your credit as soon as possible and buying a new car can help you accomplish that.

Here are the pros of purchasing a vehicle following a bankruptcy:

  • Means of Transportation – which may be vital for you to ensure a steady income.
  • May Help Rebuild Your Credit – making regular payments on time will help build positive credit history and slowly improve your credit score over time.
  • More Offers to Choose From – after a bankruptcy, you will likely have dozens of dealerships trying to win your business so you will have more options to choose from to get the best deal possible.

The Drawbacks of Buying a Car after Bankruptcy

Depending on the original reason that caused you to have to file in the first place, getting yourself back in debt immediately after filing for bankruptcy could be a risky option. The majority of bankruptcies were filed by individuals with low income. If by purchasing a new vehicle, the car payment puts a strain on you financially, you could end up in the same position you were prior to filing. If, for instance, you were to lose your job or something went wrong with your new car that required expensive repairs, you could quickly fall behind on payments and further damage your credit.

A few cons of buying a car:

  • Could Add Financial Strain on Your Life
  • Late Payments Could Further Damage Your Credit
  • Interest Rates Will Be Much Higher Due to the Bankruptcy

The bottom line is: weigh your options and if you determine that you want to move forward with purchasing a vehicle, make sure that you can easily make the monthly payment. Since your credit score will be lower after a bankruptcy, you will likely have to accept an extremely inflated interest rate which will make the car payments much higher.

Also, make sure that you shop around to find the best deal. If you lost your car during the bankruptcy the tendency is to rush into things. No one wants to be without transportation for very long, however, it’s important that you remain patient and find the right car that will fit your needs and your budget.

For assistance with your credit or if you want to improve your credit score, please contact Credit Absolute today for a free consultation.

2 Comments

Neysha Pratts March 1, 2018 at 11:38 pm Reply

How I can be approved for an auto loan after mu bankuruptcy

Derick Vogel October 26, 2018 at 5:10 am Reply

Hi Neysha,

While a bankruptcy may severely damage your credit score, making it difficult to get approved for a loan, you may still be able to increase your score significantly with the right help. Give us a call for a free consultation and we’ll explain how we can help.

https://www.creditabsolute.com/

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I decided to go with Credit Absolute the end of May 2021 after reading positive reviews. I was skeptical at first, but like some others decided to give them a chance. I had tried other credit repair services in the past, but was looking to try a company that did more. I’m glad I did! Nothing but positive results thus far, their method seems to work as I’m getting negative items deleted and corrections updated to my file. Also, my credit scores have increased significantly. Really happy I chose Credit Absolute.
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The folks at Credit Absolute have completely changed my life! They aren't the type to just "set it and forget it". They take on your individual case and go in depth to help you make the right moves to get your credit score up. Their attention to detail and responsiveness are unmatched to any other financial institution/advisor I have worked with in the past. I love the fact that we have monthly 1 on 1 reviews to go over my progress and to set next steps on how to keep improving (they also hold me accountable, which I need haha). If you are like me and never had much education on credit best practices, Credit Absolute will guide you step by step and they are always willing to answer questions or provide you with the resources you may need. They are a company who TRULY cares about their clients and it shows. I have been working with them for about a year now and not only has my credit score gone up significantly, but I now have the education I need to continue to make wise financial decisions in the future. I am glad to have Credit Absolute as apart of my "team" as I work towards my financial goals!
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19:47 28 May 21
I was surprised by the results. It happened relatively quick and I was very impressed with the true professionalism. My credit has now improved to where my scores are up by over 100 pts and I was able to open two credit cards and start my way back to having great credit again. I highly recommend this company and will refer anyone who needs to improve their credit. Thank you team for all that you did and continue to do for me.
AllHail TheQueen
AllHail TheQueen
23:27 14 May 21
I started Credit Absolute in April 2020, we are now in the beginning of May 2020and my score has already increased tremendously. I was not expecting movement so soon! The team is very well versed and experienced in what they do, most importantly they love helping others get credit approvals and it shows. You are provided with a lot of resourceful videos to get an understanding of how credit works, the myths, and the methods to help you get back on track. In addition, the team is very attentive with updating you every step of the way, sending you emails of progress and setting up one-on-one sessions. I joined Credit Absolute to get me on track to purchase a home & I can easily see that happening sooner than I thought. I am grateful for their quality of business, it was the best decision I made.
Alexander granillo
Alexander granillo
22:56 20 Apr 21
I have been a client of Credit Absolute for over a year now and it truly has been one of the best decision that I have ever made. Credit Absolute helped to improve my credit score and I am so happy about it!! Their staff (Felicia, Karina) are extremely helpful and resourceful. I highly recommend Credit Absolute if you want to improve your credit score!!
Bryant redd
Bryant redd
20:22 13 Apr 21
After reading all of the great reviews about Credit Absolute, I decided to give them a shot. I do not regret that decision! When I first started out my credit score was below 500 with a TON of accounts in collections and late payments.. Fast-forward a few months, I'm now sitting at a 600+ credit score 80+ late payments removed, and I'm almost ready to buy a house. The whole team over at Credit Absolute have been so helpful in guiding and teaching me throughout this process. (A very special thank you to Felicia for being so welcoming and available to answer EVERY question I have ever had about credit.) A little advice to people contemplating on whether or not to join - DO IT. Initially, I was hesitant because some things just seem too good to be true, right? Wrong. It really is THAT easy.. These people go to bat for you and they LITERALLY do all of the work. You have nothing to lose. If you are looking for credit repair, you're here for a reason. If you don't do anything about it, nothing is going to change. Give them a chance. I wish I had done this years ago.
Matt Pine
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Bri K
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20:58 12 Mar 21
I’m so grateful for Credit absolute. From the very beginning speaking with Derick I felt at ease because he was so knowledgeable about how everything worked. Then there are his associate Felicia and Karina who have both been so great through this entire process doing monthly reviews so I can see first hand the progress and improvement. I will say it was a lot I didn’t understand about credit until I started with them and now I feel comfortable and equipped to better manage my credit successfully. Most importantly though is the fact I got real results! My credit score has went up almost 40pts since starting last summer and I honestly couldn’t of done it without this company. I still have a little ways to go but I’m confident I will almost A1 credit once I’m completed because it hasn’t even been a year and I’m seeing major improvements.
Daniel T
Daniel T
15:10 09 Mar 21
So far good company to work with, very professional, yes they are busy but they will respect all appointments. I missed one of my appointments with them and they called me until I answered and rescheduled and got it done. Thx to them, got a few deletions as well and they will definitely help you out. I do recommend!!!!
Krystal McClure
Krystal McClure
22:46 11 Feb 21
This company is awesome! They have a great team who are very straight forward and honest. They answer any and all questions you may have throughout the process. There are no surprises, they do a very great job providing all the information you need prior to any commitment. Derogatory items were removed and my credit score shot up in less than 5 months. Wow!
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Ulysses Martinez
21:06 05 Jun 20
Credit Absolate is helping me get my credit score up. They have done by far a fantastic job. I couldn't be more happy with the experience and the customer experience is phenomenal as if your part of the family. They make sure you understand your credit usage and the educational videos are very clear. They are changing my life around. Just being with them for 2 months I got my score from poor to fair and dropped of some accounts from my cresit report. I cant thank them enough. Truly a success story
Angel  Maldonado
Angel Maldonado
14:27 30 May 20
They are amazing! Not just Derk but the whole team is great. The videos they provide are so helpful. They just don't help you improve your credit score, they also teach you how to manage your credit score. If you have bad credit contact them 1st before you even start trying to fix your credit on your own!!!
Keith Russell
Keith Russell
23:40 29 May 20
Easy to work with. Very fact based and focus on teaching me how the credit scoring system really works. My credit score increased by 100 points. Best investment in my credit worthiness. Great customer service, this is the real deal.
Fanisha Vela
Fanisha Vela
16:05 05 May 20
This is a wonderful team to work with. They have made the process so easy and efficient. Results seen within the first round of action!
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Brandon Dickinson
01:04 26 Mar 20
What an awesome team. They work hard and get things done. My credit has jumped amazingly and the coaching videos are very informative to every detail. Would recommend this company to anyone looking to better their credit.
Bre Udave
Bre Udave
22:59 04 Mar 20
this has been one of the best experiences i've had working with a company! i am very happy with my success thus far and everyone (especially Leslie) has been so helpful with everything! If you're looking to fix your credit, stop searching and use this company!!
Steven Lasseson
Steven Lasseson
14:51 28 Feb 20
I've tried a few other credit repair companies and Credit Absolute has provided the best service I've come across. In just over a year, they were able to get numerous items removed from my credit report. The process is simple, the staff is easy to work with, and the results are everything you'd hope for. If you are looking for help in your journey to financial freedom, do yourself a favor and give Credit Absolute a call.
Kade Deeyor
Kade Deeyor
21:51 19 Feb 20
Credit Absolute has been a huge help for me. Since the beginning I’ve seen an enormous increase in my credit score. Felicia and Leslie are especially helpful, concise, and very informative. They both always get back to me within minutes if I have any questions or concerns. I would highly recommend Credit Absolute to anyone seeking a better understanding of how Credit Scores actually work or if you’re looking to increase your scores.
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Phuong Mai Pham
17:56 13 Feb 20
Credit absolute has helped me tremendously over the past few months. My scores for all 3 credit bureaus have increased by 50+ points. I appreciate the education on credit. I am now much more knowledgeable and strategic about when I should and should not use my credit cards. I look forward to my progress as my goal is to purchase a home by the end of the year!
Doug Donaldson
Doug Donaldson
06:13 21 Dec 19
I noticed a few changes on my credit report that had lowered my score which concerned me and after looking at reviews online I decided to set an appointment with Derek at Credit Absolute. I was fully expecting to spend hundreds of dollars for his advice on what I should do to get it back up to where I had it. After consulting with him and looking in depth at my report, he gave me some tips and helped me understand how the 3 bureaus work and what I could do to increase my score. Best of all..... he didn't charge me a penny. Derek is an honest guy, running an honest business, and if you are looking to build your credit score then he is the guy to turn to. It was about a year ago that I met with him and my score is up over 90 points. 10/10 would recommend Derek at Credit Absolute!
Ashley Krolak
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21:58 25 Nov 19
Thank you to entire team at Credit Absolute! We have accomplished so much in a short amount of time. They have helped my whole family increase our scores. They are organized, helpful and get the job done all while teaching you helpful hints along the way. I highly recommend this company for any credit needs.
dan uyematsud
dan uyematsud
21:29 13 Nov 19
Simply the BEST!!!!!!! Derick, Felicia and Becky are extremely good at their job. They work very hard to teach one how to improve their credit as they work very hard on their end to build your credit. I am very pleased as I see my credit score increasing in a short period of time. Thank you again, Dan U
nestor victore
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22:14 04 Nov 19
You guys have done an amazing job, I'm very happy with my score has improved over 100 points. I'm happy with you guys services and help, thanks.
Tina Abbott
Tina Abbott
02:07 01 Nov 19
My experience with Credit Absolute has been nothing but wonderful! The entire staff are very knowledgeable and understanding. Felica is the one of the nicest people.
Christopher Moore
Christopher Moore
15:10 03 Oct 19
Communication with Derick and the team couldn't be better. I spoke directly to Derick and he was upfront, honest and didn't waste time. I would certainly recommend Credit Absolute to anyone who is looking into credit repair. They'll give you an honest overview of where you are and what they can do to help you reach your goals!
David Burgess
David Burgess
19:02 20 Aug 19
Derick and his team have been extremely helpful and informative throughout this entire process. I would recommend to anyone who wants/needs to repair credit quickly! Worth more than the money without question!
steve moore
steve moore
23:32 16 Aug 19
Derick and his team were awesome! I would highly recommend their services if you are looking to refurbish your credit score!!! +A all around for his team and the willingness to help me out !
Zacary Roberts
Zacary Roberts
03:00 26 Jul 19
Felicia helped me out so much, the company is professional l, but they treat you like your their only client. They are thorough and honest and my credit score has gone up remarkably ever since I started working with them. Thank you so much!
Chris Gunn
Chris Gunn
18:50 25 Jul 19
Good folks. Money well spent. Their service works! I finally got my credit straightened out to where I could buy a home because of them.
Christy Russell
Christy Russell
15:37 25 Jul 19
This company provides a great service! Friendly staff, plain-spoken, direct, no nonsense. They really make you feel like they care. Simple and straight-forward approach. They analyze your credit report and quickly make a plan to step-by-step repair any flags. I highly recommend their program.
Christian Wunder
Christian Wunder
19:35 18 Jul 19
They have been great to work with. Going on 3 months now and my score has taken a huge jump. I've had items removed from my credit and every month we go over our strategy to maximize the improvements. Highly recommend :)
Baron Adelmann
Baron Adelmann
21:59 26 Oct 17
Derick and his team have helped me tremendously! He explains the process of improving your credit and does all of the work for you! My credit score has improved drastically and I know that I couldn't have done it without the help of Credit Absolute. Because of them, my business has continued to thrive in a way I never thought possible. Thank you Derick and the Credit Absolute Team!
Gabriela Lovelace
Gabriela Lovelace
23:17 30 Jun 17
I want to thank the wonderful team of Credit Absolute for all the work they did in help me clean my credit! They have teach me how to keep my credit clean and how to make it grow! I will be their customer for life and I recommend to anyone who needs help with their credit! Credit Absolute you are awesome!!!!
Sho Sho Smith
Sho Sho Smith
22:31 16 Feb 17
Derek just made my day when I thought my credit was being compromised due to a balance on my late husband's credit card. He checked it out my credit health and assured me that I lost no points and the balance was forgiven. Great news! He gave me pointers on how to get my credit score even higher to put me into the premium level and coached me on getting back on my feet, credit-wise, after my husband's death. A great experience!
Vanity Hernandez
Vanity Hernandez
20:15 19 Jul 16
I was referred to Derick when my credit score dropped 3 points as I was in the process of trying to get a mortgage loan. Derick gave me GREAT advise and also helped confirm all the credit myths I have overheard on how to improve your credit score. Not only did he give me advise, he not once tried to have me hire him like others usually do. Derick was genuine and that's hard to come across with business. :)
Ian Farruggio
Ian Farruggio
19:29 05 Jul 16
Derek was completely professional and offered helpful suggestions to help me improve my credit. He was honest, in that his services were really not needed and helped to point me in the right direction free of charge. If you have any questions regarding your credit, this is the only place to go!!!
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