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 Dear
Bankruptcy Adviser,
I filed for bankruptcy in July 2006. I am thinking
about leasing a car. What are the chances of it
being approved?
-- Steve
 Dear
Steve,
Your bankruptcy isn't as much of an issue as you might think. The car company knows that, because you've filed recently, you can't file again for the entire time of the lease agreement. If your income is sufficient to make the payments, you will be under more pressure to fulfill your end of the agreement. From their perspective, this makes you a better risk.
However, the issue that really determines
whether you can lease a car is your credit. Even
if you have a solid income right now, that's only
one component of how lenders review your creditworthiness. Thus, my question
to you is: What have you done since the bankruptcy
to re-establish your credit?
It is amazing how simple it is,
but most people I see who file bankruptcy are
so fed up with credit and debt issues that they
wait forever to re-establish their credit. Don't
do this, Steve. If you haven't already, here's
how to start.
First, get over any shame, anger or frustration you may have regarding bankruptcy and your financial situation. These emotional issues can sometimes be the biggest hurdles.
Second, you must look at your credit report and review all negative notations. You need to know when each negative mark can be taken off. That way, if the credit reporting agencies don't remove those negative trade lines, you can notify them and make sure it gets done. This is important to making your score rise.
Third, you must use the ULTimate
plan to re-establish a positive credit history.
That starts with Use, Limit and Time. Get access
to credit, either through a high interest-rate
credit card or a secured
card. At that time, Use the card at least
once every month, even if only for a piece of
pizza, then pay the balance off in full. If it
is possible to get a second card and do the same
thing, that's even better. The sooner you show
a new, good payment history, the sooner your score
will increase. However, if you ever carry a balance
from one month to the next, then you MUST stop
using the card until the balance is paid in full.
Every six months or so, request
credit Limit increases on the cards. Higher limits
mean banks trust you more (because of your good
payment history). This translates to higher credit
scores.
Maintain this process over Time
and your credit will rise. It is possible to establish
good credit within a few years if the ULTimate
method is followed properly. Steve, I suspect
that it may be possible for you to buy (and possibly
lease) a reliable used car relatively quickly.
Follow the above plan to re-establish your credit
and try for a lease (or purchase) every few months.
Eventually, you'll get it.
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