Doug's Credit Center Blog

Buying a Car During Bankruptcy with a Co-Signer

Having to deal with auto loans for people who have had a bankruptcy is a serious issue, and you need to consider it as so. Despite the financial situation you are in, you still need a car to get to work or to your classes. Fortunately, buying a car during bankruptcy with a co-signer is one possibility you can explore.

Your Co-Signer’s Financial State

Ultimately, since you are in no financial state to purchase a vehicle, you’re going to have to choose a co-signer who has his or her finances in order. Buying a car during bankruptcy with a co-signer is possible if this person has good credit and a monthly income that qualifies for the amount of loan you want to take out.

Responsibilities of the Co-Signer

Both you and the co-signer need to understand the conditions of the program before committing to the terms. Basically, you are going to be the one who has to pay for the car loan because it is your vehicle. However, according to the agreement, if you do not pay for the car, then the co-signer is going to have to take on the responsibility. Therefore, you need to ask someone who really trusts you since this could be a lot of financial responsibility for him or her.

Going Together to the Dealership

When you go to the dealership to receive the final approval for the loan, the co-signer actually needs to go with you. You cannot just say that you are going to have a co-signer. The dealer will need to run his or her credit and assess the person’s financial situation. Finally, both of you need to sign the paperwork and terms of the agreement. After that, making the payments is up to you. Still though, you should let your co-signer know that you’ve been making your payments to put his or her mind at ease.

Being in a state of bankruptcy means you’re going to have a difficult time qualifying for any sort of loan, and a car loan is no exception to that rule. Having a co-signer requires that you keep the following components in mind:

  • Your co-signer must have an optimal financial state of affairs.
  • You and the co-signer both need to understand the responsibilities to which you are agreeing.
  • You both must go to the dealership.

Through following these steps, you will be able to obtain a car that is just right for you.

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