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Can I Qualify for a Car Loan or Mortgage after Bankruptcy?

YES, you can qualify for a car loan or mortgage after bankruptcy. After bankruptcy, there is little problem finding willing lenders who are ready to offer car and mortgage loans. But these loans can have high-interest rates. Also, as bankruptcy filings became more and more prevalent, lenders began to offer special lending programs directed at those who have filed for bankruptcy. While these programs typically have higher interest rates, they provide opportunities to proactively rebuild credit post-bankruptcy.

Even following a bankruptcy, you can receive loans with better interest rates by doing the following:

  1. Save for a down payment. Lenders can have reduced risk on loans made with down payments. Providing a down payment will increase your likelihood of loan approval and better terms.


  1. Review your credit. Many are shocked to find mistakes or errors on their credit reports. These errors can critically lower credit scores. You can obtain a free credit report every year from


  1. Consider multiple lenders. There are multiple parties that offer car and mortgage loans, such as car dealers, auto manufacturers, banks, mortgage companies, and credit unions. Shopping the different lenders will allow you to find those that are willing to work with your credit and history


  1. Cosigner. A cosigner is someone who agrees to take responsibility for loan repayment if you fail to make the payment(s). Lenders have reduced risk when there is a cosigner; therefore, they are more willing to approve the loan or provide better terms.


  1. Wait. The ultimate tool in obtaining favorable loans post-bankruptcy is to wait. Generally, the longer you wait after filing for bankruptcy, the better your loan terms will be. Many are surprised at how quickly their credit scores rise after filing for bankruptcy. Some filers see improved credit scores in as little as 1-2 years from filing.

The bankruptcy division at Burnham Law provides a fresh start for good people who have fallen on hard times. Burnham Law is proud to help Coloradoans receive debt relief so they can get a clean financial slate. If you have filed or are considering filing for bankruptcy, Burnham Law would be privileged to represent you in your new start.

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