Car Finance after Bankruptcy


It can be tough to get car finance if you've been declared bankrupt in the past, as many implications of this status can affect your chances with lenders.


However, all is not lost if you are looking to obtain car finance after previously dealing with bankruptcy, and we can help you on your to a new car if you're in such a position.

What is Bankruptcy?


Bankruptcy is a form of insolvency – a state of financial difficulty where a business or individual is unable to pay. When you can no longer afford to pay your debts, you can declare bankruptcy.


Bankruptcy can last for at least 12 months but, depending on your income, you may also be obliged to make payments for up to three years to pay off your debts. Meanwhile, bankruptcy will show up on your credit report for the next six years.


Once you are officially bankrupt, your creditors can’t require payment. The downside of this is that your belongings will be seized and sold to make debt payments. After 12 months, and you are discharged from bankruptcy, you wil be released from any debts you have covered.


Can I get car finance after bankruptcy?


You can apply for car financing after bankruptcy, but only once a full year has passed since you have been discharged.


The following points are key when applying for car finance after bankruptcy discharge:


  • Work with a broker who has relationships with lenders specilising in offering car finance for those with bad credit


  • Make sure not to apply for credit too many times in too short a timeframe, as this will only bring your credit score down further


At Stoneacre, we have strong relationships with several lenders who can help those in such circumstances.


Meanwhile, we also offer a soft search eligibility check that will give you an initial decision without affecting your credit score, regardless of the result.


Learn More About Car Finance Eligibility


Can I keep my financed car if I file for bankruptcy?


If you already have a car on finance, before declaring bankruptcy, you should contact your finance provider to discuss the situation.


Some lenders have an agreement clause that states that when you are bankrupt, the car returns to them.


In other cases, you can make payments if allowed by the receiver. You can sometimes keep your financed car if it is essential for work or education or if you or someone in your household is disabled.


If your finance has ended and you’ve been declared bankrupt, the receiver can still sell your car if you don’t fall into one of the following categories. You can also swap your car for a vehicle of lower value.