By: Darrell Castle
Coming out of bankruptcy provides a fresh start for you and your finances. However, the fear of additional debt may leave a load of uncertainty on how you make major purchases following a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.
A major purchase that you will likely face after a bankruptcy is a new car. It is possible for you to get a car after bankruptcy, contrary to what you may have heard.
You may find after a bankruptcy, that your cash flow has improved and will allow you to purchase a car in cash. This is a great debt-free way to get a car and will not be impacted by your bankruptcy.
If you choose to get a car that will require a loan after filing for bankruptcy, many lenders will work with you and offer flexible options for financing. Higher interest rates may be at play, but will allow you to successfully purchase a vehicle. Planning a purchase well inside of your means will ensure you can easily make payments and do not run into another situation of financial turmoil.
Re-establish credit before your car purchase.
The easiest way to re-establish credit after a bankruptcy is to make timely, planned payments. As you build your credit, you will be eligible for lower interest rates that will make your monthly payments much lower.
When is the best time to buy after a bankruptcy?
While getting a new car may be an exciting time, it’s important to make this purchasing decision after a lot of careful thought and planning. You should wait until you have received your bankruptcy discharge before making a major purchase.
This date is different based on your specific case. Typically, a Chapter 7 case will receive the Notice of Discharge no more than 90 days after the meeting of creditors. A Chapter 13 case is very different and can last longer. If an emergency arises and you must make a purchase while navigating through your bankruptcy, you must get approval from the bankruptcy court through the help of your bankruptcy attorney.
Our Memphis Bankruptcy Attorneys Can Help.
Darrell Castle & Associates has been providing legal services to the Memphis community for over 30 years. Our attorneys’ passion for helping people in the Mid-South regain control over their finances has been recognized by Martindale-Hubbell, receiving multiple Client Distinction Awards for our work.
Fill out the form on this page to be contacted by one of our bankruptcy attorneys. We can advise you on the best route to take on making a major purchase while going through a bankruptcy.