Can I Buy a Car After Filing a Chapter 13 Bankruptcy?

Get Car Financing
Even with poor credit.

By

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - April 24, 2019

Once your Chapter 13 bankruptcy has been discharged, you can head to a dealership and buy a car. But, you don’t have to wait until it’s been discharged to get auto financing. Chapter 13 bankruptcies take years to complete, and many subprime lenders are willing to work with someone in an open Chapter 13. If you’re wondering how you can buy a vehicle after filing a Chapter 13, keep reading.

How to Buy a Car with an Open Chapter 13

Things happen, and sometimes you need a new car while you’re in the middle of a Chapter 13 bankruptcy. Three or five years is a long time to wait, but, luckily, there’s a way to finance a vehicle during this time, it just make take a while to get approval from the court.

In order to successfully finance a car during a Chapter 13 bankruptcy, you need to visit two people: a dealers’ special finance manager and your trustee.

When You Visit the Dealership…

The dealership’s special finance manager is the first person you need to see when buying a vehicle during bankruptcy. You need to request a sample buyer’s order that includes your proposed loan term, maximum interest rate, monthly payment amount, and vehicle choice.

CarsDirect Tip: Make sure the phrase “or similar” is listed next to the car you choose. This way, if the vehicle you want is sold while you’re in the middle of the process, you don’t have to start over and can pick another similar one.

When You Visit Your Bankruptcy Trustee…

Once you have your sample buyer’s order, you can take it to your trustee and discuss why you need a car. You and your trustee fill out the necessary paperwork, and your trustee determines how this new debt is going to affect your Chapter 13 bankruptcy repayment plan.

If the trustee agrees that this new payment fits into your budget, they then file a motion to incur debt with the court. Copies of the motion are sent to your creditors, and they can dispute your petition. If they do, you may have to go to court, yourself.

When You Visit the Court…

If you’re required to attend a hearing, you must appear in court. Your creditors may attend, and even object. Ultimately, the decision is up to the court, and if they approve the motion, you receive a court order to incur additional debt which you can take to the dealer to complete the car buying process.

Need Help Finding a Dealer to Work With?

If you're denied by a lender during this process, you either have to start all over again or possibly even wait until your bankruptcy is discharged. Or, maybe, you just weren't working with the right dealership.

It isn’t easy finding a special finance dealer that knows how to handle bankruptcies, but we can take the stress out of searching for one. CarsDirect has a knowledgeable network of special finance dealerships that have the resources available to help people in many credit situations, including bankruptcy.

All you have to do to get started is fill out our auto loan request form and we’ll work to connect you to a local dealer!

Need a Car Loan?

It only takes a minute.

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


Loan approval is not guaranteed and is subject to credit application and approval of the lender. Individual loan terms may vary. Use of this website constitutes acceptance of CarsDirect.com's Terms of Use, Disclaimer, Privacy Policy, and Cookie Policy.

Privacy Policy|Terms of Use|Cookie Policy|Disclaimer
COPYRIGHT 1999-2019 MH Sub I, LLC dba CarsDirect.com