PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Should I get a car loan before or after I file for chapter 7?
I need to file Chapter 7 and my current car is on its last leg. Should I get a car loan before I file or do I need to wait until after?
Shannon Martin · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I am sorry to hear you are going through this tough time; hopefully, this information can help. Applying for a car loan after clearing up the bankruptcy is your best bet.
Part of getting an affordable car loan is about having good credit. Unfortunately, filing bankruptcy indicates that your score is on the low side and it will probably drop again once you file. If you apply for the bank loan before filing Chapter 7, there is a chance for the bank to repossess the car as part of the settlement.
Attempting to get a car loan after bankruptcy is also challenging. Until your
credit score
increases, high-interest loans may be your only option. I suggest taking your vehicle to a mechanic and get an estimate for how much it will cost to keep your car running for a few years. A few other options to consider are:
- Borrowing a car from a friend or family member while rebuilding your credit
- Using public transportation
- Saving money for a large down payment
Having a large down payment will help your chances of approval for a
car loan
. After about a year, you may be able to refinance the car and get a lower interest rate. Saving money on your car insurance during this time will build the downpayment faster. Downloading the
Jerry
app may work well for you! Jerry shops rates with over 50 insurance carriers simultaneously and delivers the lowest options right to your phone. The average Jerry user saves $879 a year on car insurance, which will certainly start you off on the right foot.Best of luck; you can make it through this challenging time.
MORE: Can I keep my car in a bankruptcy?
View full answer
- Gregory R.
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.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
.jpg&w=64&q=75){kind=avatar}
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
