How Long Should I wait to Apply for credit after BK?

[Kahlee]

How long should I wait after BK before Applying for a Car loan or credit cards

[JeepMom]

You need to wait until you are sure you can handle it again and not end up in the same place.

[Flamingo]

After you are discharged from a Chapter 7, you need to wait a bit before apply for credit because the majority of folks who do apply for loans or cards get denied. The more you apply for credit and get denied, the more hard inquiries you rack up on your credit reports which stay on there for two years and work against you. That, including the BK on your credit reports, is bad. There are some BK friendly lenders out there (Orchard Bank, Washington Mutual, to name a few) that may or may not start you off with a small line of credit. Unless you really need a car or a credit card, it's best to wait for a while after discharge and get a good payment history going again (no late payments on anything) and when you get that established, it will help you get approved if you should apply for a car loan or credit card. It is not easy out there after filing BK to obtain credit for a while. Not everyone can get approval after filing or discharge. A lot also depends on your credit prior to filing.

Remember, a Chapter 7 stays on your credit reports for 10 years; a Chapter 13 stays on for 7. That's from the date of filing. During that period of time, you may find it hard to get any sort of credit and it's best to start off with a secured card or a small line of credit from one of the BK friendly banks.

Best of luck to you.

P.S. JeepMom does have a point though...the credit trap can be nasty and it's best to avoid it as much as possible.

[Kahlee]

I've had good payment history, but a co-signer. What do I do if i want to get out of my car but have negative equity. How can i get out of it and into a car i want with a BK, and do it by myself? I didn't put my car on the BK because it was in good standing. Anyone have some advice?

[Flamingo]

I am assuming you already filed and did not put your car in the BK - is that corrrect? And this vehicle has a co-signer? If this car survived a BK and is in good running condition it's probably a good idea to stick with that vehicle for a while before looking for another one because you have negative equity in it, are fresh out of a BK and would probably be looking at very high car loan rates on another vehicle for a while. Why do you want to get another vehicle so soon out of BK?

[JollyGG]

I agree that you should wait until you feel you can trust yourself. I'd also just keep an eye on the preapproval offers you will get in the mail. When you finally start getting some decent offers go ahead and apply if you feel ready. We were getting offers for decent cards rather quicky (but had good credit until bk) so saw no reason to take any card with fees or 20%+ interest rate. I got two, hubby got one and we called it good. I have a cap. one and a WAMU, hubby has a WAMU.

As for a car. Well your best bet is basically to wait as long as you can. If your current car works, try to make it work for as long as possible. To get the best deal on a car you need to put as much time between bk and the car as you can, have as big a down payment as possible, and take the shortest terms possible. So basically my advise for an auto loan is to just wait as long as you can and save as much money as possible while you try to make the current situation work.

[emoney]

Why put yourself in someones elsehands? Do not apply for credit until you have done all you can to rebuild it on your own.
First get one or two securied cards. Use them for at least six months and pay the balances in full each month.
By then your FICO scores should be about 650, and you not have to deal with the scum card companies. The best securied card I found was First National Bank of Omanh at only $20 per year, and they report to all three CRAs.
Regards,
emoney

[Kahlee]

I've wanted a new used car for a while, I was rushed into getting the car I currently have, and just wanted to get out of it and get something I wanted to be in. I'm not looking to get in a BMW or Benz, I just want what goes with me, but I guess I should wait until I get back on my feet completely before jumping into something else.

[Cali]

So if you have a car now, but you want to get rid of it because of the high payment and you need a car, you still have to wait 6-12mths?

[JollyGG]

So if you have a car now, but you want to get rid of it because of the high payment and you need a car, you still have to wait 6-12mths?

There have been plenty of people who have gotten new cars the day after their discharge (some even before discharge through a special type of bankruptcy loan. Usually because they gave their current vehicle up. You just need to be aware that that type of loan often has a high interest rate and unfavorable tearms. To get the best loan possible it is best to wait as long as you can. However, that isn't practicle for every one. You need to do what is best for you. If you can't afford your payment then you need to get into a cheaper car. I would recomend trying to find something that you can buy outright for cash until you can afford a different vehicle and can get better tearms. But, once again, that advice isn't always practicle for every one. We all do whatever we need to do to get by.

Excuse the typos my left index finger is in a splint.

[justplaintired]

If you lose your transportation due to BK, then I can understand needing to replace it. If you came thru BK with a car and you need to replace it because it's a piece of junk, I understand that.

Otherwise, waiting until you're sure you understand budgeting and living within your means, it seems right out of BK might be a good time to learn this lesson and worry about rebuilding credit once this lesson is down pat.

Having a cc right out of BK seems a little soon to me. We are just beginning the learning process and we haven't even filed yet. This lesson will probably take time, and until we feel confident that we won't fall back into that old trap, I don't even want to think about anything that involves a payment, secured or unsecured. We are keeping our home and that is the only payment we will have for a long while. Lesson learnt the hard way, too much debt sucks no matter how you look at it!

[Cali]

I can understand this if you were careless with your spending/credit, but not everyone had that problem.

I can afford both vehicles, but would prefer to have a better gas mileage vehicle. I have a SUV that only takes premium, which is very expensive in SoCal.

waiting until you're sure you understand budgeting and living within your means, it seems right out of BK might be a good time to learn this lesson and worry about rebuilding credit once this lesson is down pat.

Having a cc right out of BK seems a little soon to me.

[justplaintired]

I can understand this if you were careless with your spending/credit, but not everyone had that problem.

I can afford both vehicles, but would prefer to have a better gas mileage vehicle. I have a SUV that only takes premium, which is very expensive in SoCal.

I totally understand getting a fuel efficient car, that in this day and age is a necessity.

Having a cc is not a necessity and it really scares me to think about ever having another one. Learning to live within our means and budgeting and saving is a necessity and I hope we can resist the temptation of ever getting another one.

[2muchstress]

capital one sent me a letter congratulating that my bk is done. well... they said it'd take 60 sec online to view approval. so i went online and entered my current income, and check marked on 'do you own checking/saving?'
now im waiting their decision as looks like theres no annual fee, etc.
i guess capital one is crazy about having more customers to open acct. because they send lots of 'you are approved' letters before/after i filed bk.

what do you all think about this...?

[rickisbroke]

I asked my lawyer when I could LEGALLY apply for an auto loan now that my 341 is done.
He said after my discharge, after giving me a bunch of crap for wanting to get a loan.
Is this the law?
I don't want to get buried, but the 1982 VW that I'm driving now isn't going to last long. Also, I only have liability insurance on it. If it gets crashed, it's totalled.
I appreciate all the advice about saving for a car, making a monthly payment to yourself, etc, but I need to know what my options are if this POS takes a dump!
Thanks.