Buying a Car After Filing for Bankruptcy

Just because you've filed for Chapter 13 bankruptcy doesn't mean that you don't need a car. Perhaps your own business went under and you need a car to get you to work, or maybe you have a family and your old car has said its final goodbyes. Whatever the case, you can buy a car after filing for bankruptcy if you follow the book and use every resource at your disposal.

Consult with Your Attorney

Even if you've finished the paperwork and have already filed for bankruptcy, consult with your attorney on how best to go about buying a car. He or she can help you determine your spending limits as well as future budget concerns, and might even be able to hook you up with a dealership that specializes in high-risk financing. It is never a good idea to go about this type of thing alone.

Make a List of Dealers

If you live in a large city, there are probably at least a handful of car dealerships that will work with people currently in bankruptcy. Make a list of possible dealers and rate them starting from one, then contact them and ask to speak with their financing representative. When you're in a precarious financial situation, it is even more important to research your options carefully. No sense in creating an even larger debt that will eventually push you over your limits.

Consider Your Priorities

Most people who have recently filed for bankruptcy are just trying to pick up the pieces. They have no idea where they might go next or what the future has in store for them. However, buying a car is a large purchase that requires some forethought. For example, you might want a safe, dependable car that is unlikely to create steep repair bills. It's better to finance a more expensive car than face added expenses down the road (which will require you to pay out-of-pocket).

Obtain Trustee Approval

The trustee handling your bankruptcy case will have to approve before buying a car. Gather the paperwork from the car and dealership you've chosen and submit them to your attorney. He or she can handle the rest of the paperwork and get everything approved so you're ready to go. Just don't skip this crucial step and risk putting yourself in a nasty legal situation.