How do I get a car loan during chapter 13?

Is there any way to get a loan during chapter 13 bankruptcy? I just had to file for chapter 13 bankruptcy, but I need a car. I'd like to get a loan, but going into bankruptcy has destroyed my credit.

Answer
Getting car loans during bankruptcy can be difficult, but it’s not impossible! If you start a repayment plan and obtain permission from the court, you can still get a car loan.
Most of the time, you’ll need to wait a year after filing for chapter 13 bankruptcy before you can take on additional debt. But working on a repayment plan with the court can help your case. Plus, updating the court on your goals and needs can make a car loan seem more reasonable.
To actually find a car loan, you’ll need a lender that works with people who have bad, poor, or no credit. Luckily, some lenders will specifically work with people who’ve filed for bankruptcy. But you should still be careful.
The interest rates, or APR, on loans for bankrupt individuals can be high, and the terms might work against you. If you have a friend or family member with good credit who’s willing to cosign on your loan, you’ll likely get a much better deal.
Finally, make sure you pick an older, reliable vehicle. Cheaper cars will give you more capital to put toward the down payment, and your car expenses—like insurance—will be minimal.
To make sure you’re getting the lowest possible rate for the car insurance you need, try Jerry. A licensed broker, the Jerry app can help you find and compare quotes from over 50 top providers for free. Users save an average of $879 a year on car insurance—and it only takes a minute to sign up!
Lauren Smith
Answered on Oct 28, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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