April 8, 2015
How to Buy a Car in Oklahoma After a Bankruptcy
What do you do when your finances have fallen on hard times but you still need a car to take care of yourself or get back on your feet? Bankruptcy can be a big obstacle in life, but it’s not insurmountable. By being careful and taking your time, you can get your finances in order and buy a car in Oklahoma City even if you recently declared bankruptcy.
How Bankruptcy Works
In general, someone only files for bankruptcy when they have more debt than they are able to pay. Even though a bankruptcy can help protect you from creditors and give you breathing room to recover from overwhelming debt, it’s not a silver bullet. Bankruptcy has huge effects on your credit – obviously creditors won’t be too eager to loan you money after you file for bankruptcy.
There are two common types of individual bankruptcy in the United States: Chapter 7 and Chapter 13. Chapter 7 bankruptcy requires you to sell off possessions owned by creditors in exchange for your debt, but it also cancels the debt that the liquidation doesn’t cover. A Chapter 7 bankruptcy stays on your record for a long time, and you can only file for it if you meet certain conditions.
Chapter 13 bankruptcies are a bit more complicated, but in some ways safer for the person filing. Under a Chapter 13 bankruptcy, you don’t lose ownership of your assets, but you will have to develop a payment plan to repay most of the debt that you owe. Chapter 13 bankruptcies can only be used up to a certain debt ceiling and only for individuals that have a certain amount of income.
In general, Chapter 7 bankruptcies are far more commonplace. However, either type of bankruptcy is tough to recover from. If you need a car to get your finances back on track, a bankruptcy will probably make it much harder to get a bank loan.
Buying a Car After a Bankruptcy
So what can you do to get a car after you file for bankruptcy? Most of the time you’ll have a few options:
- Pay Cash – One of the best ways to get a car after filing for bankruptcy is to skip financing entirely. By paying cash for your car you avoid the need to finance it or get lenders involved, and you won’t have to worry about making any payments over time either. The only downside to this option is that it’s often hard to get a lump sum of cash together to buy a car, especially if you’re looking at models that cost more than a few thousand dollars.
- Shop Around for Loans – Even if you get rejected for financing from one bank, that doesn’t mean every bank will reject you. Depending on your credit, how long its been since your bankruptcy, and other factors like your income, you might have a chance of getting a loan from a traditional lender. You can also try to approach a local credit union for a loan. Many credit unions have easier terms and are more willing to help people out with loans they need than major banks.
- Rebuild Your Credit – In some cases, the best option for getting a car is actually to wait it out and rebuild your credit before you shop. Taking some time to rebuild your payment history can show creditors that you aren’t a risky investment and earn you better interest rates and repayment terms than if you’d tried to get a loan earlier. If you have a car that works and don’t need another one right away, this might be your best option.
- Visit a Special Financing Dealer – A final option that works for many people looking for used cars after a bankruptcy is to visit a special financing car dealership. These dealers offer financing through their own finance departments rather than working with banks or other lenders, which allows them to offer loans to customers that a bank might not work with. Special financing options can be a great resource for buyers with bad credit who need a car right away.
If you recently declared bankruptcy in Oklahoma City and need a new car to enable your recovery, come to The KEY today. We offer special financing options to buyers with bad or no credit, including buyers who recently declared or emerged from bankruptcy. We can get you approved for a car loan in just a few minutes, and we also offer free CarFax vehicle history reports and free lifetime warranties on every car we sell! Call us today at (405) 526-7010 or visit our Facebook and Twitter pages to learn more!