You filed for personal bankruptcy and your options for obtaining any loan from a creditor are severely limited. Trouble is, the car that you are driving simply cannot be depended on to safely transport you to where you need to go. What to do?

Well, you aren’t completely shut out of the loan market despite your recent personal bankruptcy filing. You can obtain a car loan with a little bit of creativity on your part.

Before you apply for any new credit post bankruptcy, obtain copies of your three credit reports to determine that the information presented is accurate. Likely, all three reports will list the bankruptcy ruling, but it could have other inaccurate and unfavorable information about you. If that should be the case, contact the credit reporting bureau and notify them of the errors and ask them to fix them at once. In addition, have the agency put a note in your file explaining the error.


Once you have cleaned up your credit reports determine the monthly amount of money you can afford to pay a car loan. You will then have a better idea what type of car you can afford, new or used, and be better equipped when you apply for a loan.

If you narrow down your search to one car, go ahead and approach a lender who specializes in car loans for assistance. Be brutally honest with them as your personal bankruptcy filing will come apparent to them quickly. This doesn’t mean that they won’t work with your, rather they need to know what options to present to you in order to extend a loan. Many car lenders work with a bunch of different financing companies and a seasoned lender will know right away which type of lender will loan you the money or not.

Once a lender has been determined you can expect the following:

You will have to pay a higher interest rate because of your perceived risk to the lender.
You will have to provide proof of income including job information.
You may be required to put down a significant amount of money, perhaps 20%.

If at this point in the game you are still in the running for a loan, then you are in decent position to obtain a loan. Simply go ahead and apply and wait for the results of the loan application. If approved for the loan, make payments on time for one year than apply for a car loan refinancing in a bid to lower your rate.