What are the future ramifications of being in bankruptcy and recently getting my car repossessed?

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What are the future ramifications of being in bankruptcy and recently getting my car repossessed?

What about future car purchases? I had a co-signer in order to get the car to begin with.

Asked on March 20, 2011 under Bankruptcy Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Legally, neither filing bankruptcy nor having a car repossessed stops you from getting credit or financing, leasing, purchasing, etc. However, at the same time, it's not as if any prospective lender, financing company, business, car dealer, etc. has to do business with you or extend you terms--and if they do extend terms or credit to you, they certainly can require a larger deposit, charge you higher rates, and/or only loan you less than they would have otherwise, because the fact of a repossession and that you filed for bankruptcy will strongly negatively impact your credit and makes you a much greater credit risk. So short answer: legally, there are not necessarily negative consequences, but practically, it will make you a much less attractive prospect for anything but an all cash sale, and you should do things (like getting a secured credit card, using it modestly, and paying it off in full each month) that will help rebuild your credit.


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