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 · Answered on Oct 19, 2021
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!
MORE: Bankruptcy car loan
View full answer
WHY YOU CAN TRUST JERRY
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.
Browse More Content
Insurance in Your State
What Others Are Asking
How often do electric cars run out of charge?
I’m thinking about buying my first electric car, but I have some concerns about range and how often I’ll need to charge it. How often do electric cars run out of charge?
May 17, 2022
Is there a way to get a car loan without a cosigner if I have bad credit?
I have bad credit, but I don't have anyone to cosign on the loan. Can I get a car loan even without a cosigner?
Oct 19, 2021
How does Progressive Snapshot know if I’m driving?
For years I’ve been paying insurance rates through the roof. I saw an advertisement for Progressive Snapshot and thought I’d give it a try to lower my premium, but how does it know if I’m driving?
Mar 15, 2022
Read Advice From Car Experts At Jerry
Florida Motorcycle Insurance: Costs, Laws, and Quotes
Here’s what you should know about motorcycle insurance in Florida before shopping around.
Will My Insurance Cover Me if My License Is Suspended?
Your car insurance may not drop you immediately after a license suspension, but it’s important to know what your own policy says about the consequences.
Browse By Topics
Easiest way to compare and buy car insurance
Find insurance savings — it's 100% free
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies