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A New Car After Bankruptcy?
In Northwest Indiana, many people rely on a car to travel to work. It is nerve-wracking when you are in need of a new car, but can’t get one. When you are facing bankruptcy, you likely can’t afford another payment, like leasing or financing a vehicle. After bankruptcy, will you be able to buy a car?
After bankruptcy, your credit score will likely dip below a score a typical lender would need to approve a car loan. With that being said, you can improve your credit score by making on time payments and spending responsibly. With bankruptcy, time is on your side. The more time passes, the better your score will get as long as you live within your means. Also, bankruptcy will eventually fall off your record all together. The timeline is typically 7-10 years.
Cars are a large expense. When you add the cost of the car, maintenance, plates, and gas, it might be more than you can handle when you are getting yourself back on your feet financially. While you save for a vehicle of your own, there may be other opportunities for you to travel to work in more affordable way. Some cities, like Valparaiso, have a bus line. There are also more online work opportunities available now than ever before. Another idea is carpooling with coworkers. Even if you contribute for gas, it is still a tiny fraction of what you would pay for your own car.
If these car alternatives are not an option, you might start saving to buy a car outright. Sure, it might not be your dream vehicle, but it can get you to and from work. After bankruptcy has stopped your large debt payments, you might have more money to save every month. The extra money might be enough to purchase a vehicle.
Another option is to pursue a car loan that designed for people with bad credit or no credit. The good side of these loans is that you can build your credit by making your payments on time. The bad side is that the interest rates are extremely high, meaning you’d be paying more than the car is worth.