Can you get a car loan while undergoing Chapter 13 bankruptcy proceedings?

I'm in the midst of Chapter 13 bankruptcy and my car just died. Is there a way to get a car loan even though I filed for bankruptcy?

Answer
Yes, you can still get a car loan if you’re in Chapter 13 bankruptcy. However, as the debtor, you must get approval from your court-appointed trustee before you can take on debt like a car loan.
Note that you may not qualify for favorable interest rates or find many lenders who are willing to extend you a loan given the circumstances. Guaranteed lenders and subprime lenders will probably work with you, but you may see interest rates in the 20% range.
If you have some extra money, paying cash for a used car is the best option for several reasons:
  • You won’t have to pay interest
  • You won’t go upside down on your car loan
  • You will be able to get a lower-cost car insurance policy
No matter how you choose to purchase a vehicle, you can avoid overspending on car insurance by using the Jerry app. Jerry will gather competitive quotes from top insurance companies for free and deliver the best deals straight to you in minutes. And the average Jerry user saves $879 a year on car insurance.
Eric Schad
Answered on Nov 15, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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