It is not impossible to get a car loan after bankruptcy; it will just cost you a little more. Many reputable lenders work with people who cannot obtain auto financing through conventional channels.

These lenders will consider past problems—bankruptcy included—in the light of your current circumstances, e.g. employment status, monthly income, debt obligations, etc. These things will have more of an impact than your bankruptcy on the details of your loan package, such as: down payment required, payment qualification, interest rate, and loan term.

It is very easy to apply for a bankruptcy car loan online. The application will give the lender permission to access your credit report, so make sure you check it first to see that all debts and credit lines involved in the bankruptcy have been marked as discharged.

If you get a car loan after bankruptcy and make all the payments on time, it can help re-establish your credit.

Changes in the Bankruptcy Law

Personal bankruptcy law has changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Anyone planning to file for bankruptcy is now required to undergo credit counseling from a government-approved organization before filing. They must also complete a debtor education course after filing for bankruptcy in order to have their debts discharged.

Both the credit counseling and debtor education course must be conducted by organizations that have been approved by the Department of Justice’s U.S. Trustee Program. To protect against fraud, the certificates of completion are produced through a central automated system and are numbered.

Pre-filing counseling and post-filing education may be provided in person, on the phone, or online. These required programs are meant to help those who file for bankruptcy to change their financial habits. Among other things, the counseling will include information on developing a budget, managing money, and using credit wisely.