When a person files bankruptcy, they have taken all their debt and asked a court of law to make the creditors forgive the debts the person has acquired. While this is a really great way for people and corporations to get themselves out of trouble and still keep some assets, it is a really, really bad thing for creditors. For seven to ten years after the bankruptcy has been finalized, it will show on your credit and will hinder your ability to get anything. Creditors do not like bankruptcy because it shows that you got in over your head and bailed yourself out the easy way. Dont misunderstand, bankruptcy in itself isnt a bad thing, but a lender will see it as such.



Having a bankruptcy on your credit report is different than having bad credit, because with bad credit, the person can still be trying to make payments. Even if you have a bankruptcy on your credit, you can still get a car loan. Your choices will be more limited, because only a few lenders will consider taking a risk on you, but if youre patient and diligent, you can and will get a car loan with your bankruptcy.





Usually, the best place to look for a lender who will give car loans to people whove filed bankruptcy is at your dealership. This can be bad and good, because youre limited on the selection of vehicles. You usually dont have very much bargaining power, either, because often, the way it works in a situation such as this one is that you pick a car, the finance person looks at your pay check stub and says, Lets see what we can do. Often in a situation where youve filed bankruptcy and are now looking for a car loan, you arent in a picky mood anyway.



Lots of larger dealerships will have connections with lenders who are willing to finance a person who has filed bankruptcy. Lots of them will advertise every six months or so that theyre having a huge sale and that if you have a job and however many dollars, they can get you financed. They will specifically mention bankruptcy in their ad because it is different than bad credit. These are the dealerships you want to look for, because they cant make a claim like that if they cant do it.



Another good place to look for a car loan with a bankruptcy is online. Simple searches will give you tons of potential lenders. Just be aware that lots of major lenders will take one look at your credit report and turn you away. Especially if its a fairly recent bankruptcy.



Ask your financial institution, too, as they may be able to work with you if youve been a customer in good standing for a while, but always be prepared to pay a higher interest rate. The best thing you can do for yourself once you have your car loan is to make sure you can afford your payments and make them on time. Each year that goes by without you getting bad credit again makes your past bankruptcy less and less of an issue, so next time, getting your auto loan will be much easier.