The short answer to this question – can you buy a car after filing for bankruptcy – is yes. However, the longer answer is that there will be several things to consider before doing so. In other words, there are several smaller questions that you should ask first, and we’ll run through them below.
[ READ MORE: Can I get a car loan after bankruptcy? ]
Would it be best to purchase before filing?
This is a question with many caveats, mostly depending on the type. If you’re filing for Chapter 7, then you shouldn’t purchase a vehicle before filing as it would just get liquidated with the rest of your assets. It would be easier to do before filing Chapter 13, but make sure that your vehicle is very necessary for your way of life. Purchasing a big-ticket item just before filing can appear to be bankruptcy fraud.
Can I purchase while in Chapter 13 or Chapter 7 bankruptcy?
If filing Chapter 7, the answer is most likely no. There is a period of time during Chapter 7 bankruptcy in which you are not allowed to take on new debt without permission from the court. So, it’s possible but highly unlikely. In Chapter 13, however, it’s a bit more possible. Due to the longer time to complete Chapter 13 bankruptcy, it is very possible that you would have a need for a new vehicle before its completion. You will still need to get permission, but assuming the vehicle is necessary to your way of life, it should be relatively easy to secure that.
Can I purchase after final discharge?
This is a more definitive yes than the previous question, but there are still some steps that you should take before doing so. In most cases, you’ll want to wait at least thirty days before attempting to take on new debt the size of a car loan. Then you should obtain a credit report from all three bureaus so that you can make sure all of your accounts are both paid for and closed. If they aren’t, then you should go through the process of repairing your credit before attempting to obtain a car loan or lease.
How long do I need to wait before buying?
There is no clear and present answer to this question. Like we said in the last section, you should ideally wait at least a month, but there is no set timeframe before you can start buying a new vehicle. As long as your credit is repaired after the bankruptcy and your final discharge has come and gone, you can technically purchase a car whenever you want.
Hopefully answering these questions has helped answer the questions you were having. If you have any more, don’t hesitate to give us a call here at Broadway Auto Credit. This is one of our specialties, so we’d be happy to help no matter your situation.