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?
Answer provided by
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.
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