For those emerging from bankruptcy, they are certainly entitled to the fresh financial start promised through the U.S. Bankruptcy Code. This often means the ability to obtain new credit accounts or qualifying for a new home loan. For many, it means shopping for a car.
This process may be intimidating for a number of reasons. The heavily advertised, low cost loans may not be offered to former bankruptcy debtors. Conversely, ridiculous, high interest rate loans may be crammed down their throats. However, former debtors do not have to settle for these high-risk loans that will likely create the same financial problems that drove them to bankruptcy in the first place.
As such, the following tips can help car buyers avoid bad loans.
Know where you fit in the market – Make sure to research different lenders and how they handle former bankruptcy debtors. While a former bankruptcy makes you a risk for one lender, another may welcome you with open arms, and a loan package that makes sense for your situation.
Be able to distinguish yourself – Even though we are nearly a decade removed from the latest recession, having a lender understand your individual circumstances is important in securing a favorable loan. This may include adding a personal statement or statements from people who helped you through tough financial circumstances can be helpful.
Avoid things you don't need - Keeping costs in control helps in keeping loan payments reasonable. With that, it is helpful to avoid extras such as undercarriage protection, clear coating additives and warranties beyond the manufacturer’s protections.
If you have additional questions about post-bankruptcy life purchases, an experienced bankruptcy attorney can help.
The preceding is not legal advice.