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Can you get a car loan after you file for Chapter 7 bankruptcy?
I'm going to file for Chapter 7 bankruptcy, but I want to know what happens to my ability to get a car in the future. Can I still get a car loan after filing for Chapter 7?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about your financial straits—but hopefully things look up soon. I’m happy to say that getting a
car loan
after Chapter 7 bankruptcy is difficult, but not impossible.In Chapter 7 bankruptcy, a trustee liquidates your assets in exchanged for discharging debt. While you can walk away from many of your loans in this fashion, the resulting derogatory mark on your credit can last up to 10 years.
However, you may still gain approval for a car loan if you take a few steps:
- Rebuild your credit in any way possible
- Pay all of your debts and bills on time
- Save up to make a sizable down payment
You may also want to work with a local bank or credit union, as these organizations are typically more willing to work with locals. You should be wary of subprime lenders—they will certainly work with you, but will charge you exorbitant rates.
If you can find a lender, don’t forget to budget for your car insurance—you’ll still need full coverage if the car has a loan. The easiest way to get the best deal on your insurance is with the
Jerry
app—we’ll get you personalized quotes from top insurers so that all you have to do is choose the plan that works best for you.Best of luck, and hopefully your financial situation improves soon!
View full answer
- Gregory R.
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