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Can you get a car loan after filing Chapter 13?
I’m in the middle of Chapter 13 bankruptcy, but my car just died. I need a new car, but I don’t have enough money saved up to pay in cash. Can I still get a car loan if I just filed for Chapter 13?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear that your car just died! Fortunately, you can still get a
car loan
in Chapter 13 bankruptcy if the court approves your request.To put together an appeal for the court, start by finding a lender. Many lenders now consider you high risk and won’t approve your application. However, you may be able to find a lender specializing in high-risk loans. While the terms will be inflexible and the insurance rate will be high, you’ll be able to take out a loan.
Once you find a willing lender, you need to get a preapproval letter to present to the court. This letter should contain:
- The amount you intend to borrow,
- your payment plan, and
- the agreed interest rate.
You’ll also need to work with your attorney to update your monthly income and expense report and file a motion. Some bankruptcy courts may ask you to appear in court and explain why you need a car loan. To raise your chances of approval, be honest and upfront about why you need a car.
If you end up taking out a loan, start saving for your monthly payments with the
Jerry
app. A licensed broker, Jerry helps users save nearly $900 per year on car insurance! Just sign up, enter your information—and Jerry will send you up to 50 competitive quotes from top providers like Progressive and Nationwide for free.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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