You filed for bankruptcy. You’re excited to receive your discharge papers. It’s going to feel amazing when it arrives and you know that your debt has been wiped clear. BUT then something happens and you need a car. You need to buy a car immediately. Maybe your old clunker broke down and no one will even buy it for parts. Maybe that loaner car your brother said you could use indefinitely suddenly got picked up by his 16 year old son. It doesn’t matter why you need to buy a car. The question is simple…can you buy a car while you’re filing bankruptcy? Can you buy a car before you’ve even received your discharge of debt in your bankruptcy case?
In years past, the answer would be no. And it wouldn’t be because bankruptcy law prevented the occurrence. It would be because auto lenders wouldn’t provide financing. They would want to see you re-establish your credit before they would approve any type of auto loan. But in today’s economy, we’re seeing more and more auto loan lenders willing to work with individuals who do not necessarily have great, good or even “kind of okay” credit.
So, can you purchase a car during bankruptcy? Before you’ve even received your discharge? I won’t say it’s impossible. I will say that you might need to wait until you’ve received your discharge. But buying a car immediately after bankruptcy is a definite possibility. Auto lenders in today’s market are getting stuck with their inventory. Cars are lasting longer. Many buyers are opting for certified preowned vehicles that are basically just like new cars. Many car lenders are getting desperate to move their inventory. This makes them more likely to finance vehicles even if you come to them with bad credit.
What makes it difficult to buy a car before the discharge? Your debts have not been officially eliminated yet. Creditor collection activity has been put to a stop. But your debts are still there. The bankruptcy process takes approximately 120 days from filing date to the case being closed.