Chapter 7 Bankruptcy Car Loans
Would it be a good idea for someone who has a recent BANKRUPTCY to apply for a car loan?
A friend declared Chapter 7 Bankruptcy last fall before the law change, and his debts were cleared and honestly I cant really say if it is a good idea or not for him to apply for a car loan as his first application for credit of any kind post-bankruptcy. I would tell him to look into credit counciling, but every site I have seen has some kind of a catch or is not entirely unbiased. The loan amount he wants is 15K for a late model used car. His income to debt ratio is excellent now, unlike a year ago when he was not recieving his pension.
Any advice for him considering it is roughly six months since his Chapter 7 bankruptcy discharge and if applying for a car loan is fine at this point?
You CAN get credit immadiately after a BK, but the rate usually sucks. You can rebuild your credit and get a better rate, but that takes time. Best thing to do is to start with a couple small credit cards (like a gas card and an overdraft visa) and build from there. Wait on big ticket items because the higher rate will affect you more.
If you HAVE TO get a car now, then bite the bullet and consider a less expensive one for a year or so and then get a better loan.
Can I keep my car if I file a Chapter 7 Bankruptcy?
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