If you have filed for bankruptcy, completed the process and your case has been discharged, you may be wondering what will life be like now. Do not despair, there is a life after bankruptcy. Rebuilding your credit should be your first priority because it will take some time to get your life back to normal. How much time it takes will depend upon you and how you approach the effort. You may also want to know if you can get a car financed. Keep reading to learn how to get a car loan after bankruptcy.

Successfully obtaining a car loan will become easier as time goes by, meaning the longer the amount of time that passes between your bankruptcy's discharge date and the date that you apply for a car loan, the better chance you have of getting the loan approved with desirable terms. You may begin to receive offers for a new or used car loan soon after your bankruptcy discharge. If you decide to apply immediately, understand that the interest rate charges, fees and any penalties for late payments (should you fail to pay on time) could be substantial. Make sure that you fully understand all of the terms of the contract before signing. Ultimately, your goal is to have a good credit score and to qualify for a low interest rate. Thus, the first step is to rebuild your credit rating.http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/BounceBackFastAfterBankruptcy.aspx http://www.legalhelpers.com/after-bankruptcy/car-loan-after-bankruptcy.html

Many times after a bankruptcy has been discharged people state that their credit report still shows inaccurate negative entries and errors, which keeps their credit scores low. To avoid the possibility of this happening to you, the first thing to do is get a copy of your credit reports from all three of the national credit reporting bureaus (Experian, Equifax and TransUnion). By law the credit bureaus are required to provide you with a free annual credit report upon your request. You must make the request to each of the three major credit reporting bureaus in order to receive them. Once you have received all three of the credit reports, then start the process of going through all of the credit history entries looking for any that are inaccurate. Many times a report may still show open debt accounts or obligations that were previously closed due to the bankruptcy, but the credit history has not been changed to show the discharge or write-off. It is critical that you notify the bureaus of any errors and request that they be removed. The content of your credit report is what determines your credit score, and inaccurate negative entries can keep your credit score down for years, so this step should not be overlooked. http://www.ftc.gov/os/statutes/fcra.htm http://en.wikipedia.org/wiki/Fair_Credit_Reporting_Act

The next step is to prepare for the loan process. This is a matter of getting organized and being able to present your case in the best light so that you can qualify for better contract terms. Applying for a car loan immediately after a bankruptcy may not be the best approach because even if a loan were to be offered, it is likely that the interest rate charged and the terms of the contract would be be less than desirable.

First it is important to start rebuilding your credit. To do this, consider getting a secured credit card to help with improving your credit score before applying for a car loan. Choose a few local banks or credit unions and find the secured credit cards with the best rates and fees. The secured credit card is guaranteed issue and you will have to put money into a deposit account to secure or collateralize the card. Typically your spending limit on this type of card will equal the amount of money you have put on deposit. You will still need to make monthly payments on charges you incur each month, and it is critical to adopt and maintain good credit-paying habits. The card issuer will report your credit history to the bureaus, which will increase your credit score if you have been making your payments on time. http://www.bankrate.com/finance/credit-cards/10-questions-before-getting-a-secured-credit-card-1.aspx

The next step is to establish a budget and to have a firm understanding of how much you can afford to pay each month for a car loan before applying. Write down in detail all of your monthly debt and expense obligations, which subtracted from your monthly income should give you a good idea how much you can afford. http://www.legalhelpers.com/after-bankruptcy/car-loan-after-bankruptcy.html

Now that you have cleaned up your credit reports, started to rebuild your credit and created a household budget you can live with, it may be time to apply for a car loan. When you decide the time is right, call some of the car dealers in your area and ask how they handle car loans for people who have had a bankruptcy discharged recently and if they will work with this type of credit scenario. All dealers will have different criteria, so try to get a yes or no answer before spending a good deal of time with them. Hopefully, there will be several car dealers that will work with you on obtaining a loan. It is very important that you clearly understand all of the terms of the car finance agreement before signing. If you are still unclear on all of the terms, bring in someone that you trust to help you clear up any misunderstandings.

Even if you have successfully obtained a car loan after bankruptcy, the interest rates may still not be as low as they could be. It is important to make sure that all payments are made on time and that you adopt and maintain good credit habits. After six months to one year of making on-time payments, you might want to consider the possibility of refinancing that loan to one with a lower interest rate. Before you do, make sure that the savings to be incurred from the lower interest rate on the new loan is more than any fees that may be incurred with refinancing the original car loan.

The information contained here is not a substitute for qualified legal or financial advice. Please see your attorney or CPA for further information.