I’m in a really difficult situation and could use some support. I’m filing for bankruptcy this week, and my credit score is under 400. I’m about to have my car repossessed because it’s completely broken down.
I’ve made some unfortunate financial choices in the past, but I’m committed to making positive changes now. The urgent issue is that I need a vehicle to help me regain my independence. Unfortunately, I don’t have any savings to buy a car outright.
I know that given my credit score, my options for financing will be very limited and likely expensive. I’m preparing myself for high interest rates and monthly payments that will be a challenge. I just need something dependable to help me get to my job.
Can anyone recommend financing companies that assist those with very poor credit? Are there dealerships like DriveTime that cater to individuals with bad credit? I would greatly appreciate any advice or recommendations.
Honestly, you might want to hold off on filing bankruptcy until after you get a car if that’s even possible. I know someone who went through something similar and their lawyer actually told them to get the car first because once that bankruptcy paperwork is filed, you’re basically radioactive to lenders for a while.
If you can’t wait, maybe look into smaller independent dealers in your area. The big chains like DriveTime are obvious choices but sometimes the little family-owned lots are more willing to work with people in weird situations. They might not advertise it but they’ll finance anyone who can fog a mirror.
Also not sure if this applies to your situation, but if you’re still employed and the bankruptcy is mostly credit card debt or medical bills, some lenders might still talk to you. Employment history matters more than credit score at some of these places. Just whatever you do, don’t let them talk you into a payment that’s more than like 15% of your take-home pay. I’ve seen people get excited about getting approved and then end up worse off than before.
Your biggest challenge won’t be finding someone to finance you - it’ll be avoiding the predatory lenders who specifically target people in your exact situation. Bankruptcy plus sub-400 credit makes you prime bait for dealers who will put you in a $15k loan on a $5k car. I’ve seen this happen countless times in the debt trading world where these inflated auto loans get packaged and sold off immediately. Capital One Auto Finance and Santander Consumer are two major players that will likely approve you, but expect brutal terms. Before you sign anything, research the actual value of whatever car they’re pushing on KBB or Edmunds. Many of these specialty finance deals involve cars priced at 150-200% of market value to compensate for expected defaults. If possible, bring someone with you who knows cars and financing to the dealership. These places have sales tactics specifically designed for desperate buyers, and you’ll be walking in with a target on your back. Don’t get emotionally attached to the first approval you get - shop around even with bad credit.
The timing on this is pretty brutal, honestly. Filing for bankruptcy while needing car financing puts you in one of the toughest spots in auto lending. Most traditional lenders are going to see that active bankruptcy filing and run the other way, even the subprime specialists.
That said, the market for deep subprime auto loans has actually expanded over the past few years. Companies like Carvana, Vroom, and yes, DriveTime have been pretty aggressive in this space, though their rates can be eye-watering - we’re talking 20-25%+ APR territory. Some credit unions also have hardship programs that might be worth checking out, especially if you can show stable employment.
One thing I’ve been seeing more of lately is “buy here, pay here” lots getting creative with financing structures. They’re basically becoming their own lenders and some are surprisingly flexible with bankruptcy situations since they’re keeping the paper in-house rather than selling it off.
Just be super careful about loan terms and make sure you’re not getting buried in a payment you can’t sustain. The last thing you want is another repo while you’re trying to rebuild. The auto finance world is pretty unforgiving right now with interest rates where they are.