Need to purchase a car after Chapter 7?
You can probably find a lender who is willing to give you a loan immediately after bankruptcy, but you will be paying subprime interest rates. Borrowers with credit scores below 580 may pay two or three times the rates of borrowers with credit scores in the mid600’s and five or more times the interest rates of borrowers with scores above 700. You will get a better interest rate and find more lenders who are willing to approve you for a loan if you give yourself a year to mend your credit. During this time, pay all your bills and debts that survived your bankruptcy on time. Get a credit card. You will probably have to settle for a low credit limit and high interest rate. You may even need to deposit some money with the bank to secure the card. Use the card sparingly and pay off the balance in full each month to avoid interest. Even six months of regular credit card payments can make a difference. Now that your debts have been discharged, you may have some breathing room in your budget for savings. Try to save some money every month toward a down payment. The bigger your down payment and the smaller your loan, the more willing lenders will be to lend to you as their risk goes down. Also, the easier it will be for you to make your monthly payments.