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How do I get a used car loan if I'm in Chapter 13 bankruptcy?

I'm in Chapter 13 bankruptcy, but my car is on its last leg. I don't want to blow a ton of money on a car given my current situation, but I still need transportation to get to work. Can I get a used car loan?

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Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about your bankruptcy, but hopefully things are on the up and up.
You may be able to get a
used car loan
during Chapter 13 bankruptcy, but with some stipulations.
First off, you won’t be able to get a used car loan or any other type of significant loan without approval from the bankruptcy court. The steps are:
  • Getting a buyer’s order from the dealership
  • Bringing it to your court-appointed trustee
  • Creditors and other involved parties make a decision
Another potential hurdle is finding a lender that’s willing to finance you. When you’re in the middle of bankruptcy proceedings, you’re about as high-risk as they come. Some lenders won’t touch a car loan with you and those willing to do so will almost certainly charge a high interest rate. Make sure you’re aware of the potential costs.
If possible, skip the car loan altogether and pay cash for a car. This will avoid taking on more debt while getting you the transportation you need.
Need insurance for your new ride? Check out the
Jerry
app to locate the policy you need at the best price.
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