Can You Buy a Car without Your Trustee’s Approval?

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Even with poor credit.

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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 9, 2019

You absolutely shouldn’t buy a car without your bankruptcy trustee’s approval. If the judge or trustee finds out that you financed a vehicle without their permission, they can force you to surrender it and possibly dismiss the bankruptcy – causing you even more problems.

Buying a Car without Your Trustee’s Approval

In theory, you could buy a car without your trustee’s approval, but know that you’re dancing with the devil if you do. If you get caught financing a vehicle without your trustee’s permission, your trustee can force you to give up the car, or even dismiss the bankruptcy altogether – leaving you with an unfinished bankruptcy.

Many lenders, including buy here pay here dealers who don’t typically run credit checks, have you sign a document stating that you’re not currently dealing with a bankruptcy. If you sign this and you’re knowingly in an open bankruptcy, you’re breaking the law.

You must properly have your trustee file a motion to incur debt with the court and get approved if you want to lawfully get a car loan.

Getting a Car Financed with Bankruptcy On Your Credit Report

Regardless of whether you filed a Chapter 7 or Chapter 13 bankruptcy, it’s best to wait until the bankruptcy has been discharged before looking for auto financing, if you can. Subprime lenders are familiar with bankruptcies and like to see that they’ve been successfully completed.

If you’re in an open bankruptcy and can’t wait to get a car loan, it’s still possible, but, ultimately, it depends on your finances and the type of bankruptcy you filed.

If you have an open Chapter 7 bankruptcy, most lenders are going to turn you down for auto financing because the process is fairly short. If you have an open Chapter 13 bankruptcy, you have a better chance of getting approved.

The reason for this is because lenders know it takes years to complete a Chapter 13 bankruptcy, and as long as you have a sample buyer’s order ready and approval from your trustee and the court, you're able to buy a vehicle.

Finding a Dealership to Work With

No matter where you’re at in the bankruptcy process, getting a car loan can still be a time-consuming process. If you don’t work with the right lender, you could be setting yourself up for disappointment. Luckily, we can help you avoid this.

At CarsDirect, we connect car buyers to local dealerships with the lending resources to handle various credit situations, including bad credit, no credit, and bankruptcy. To get things started, simply complete our auto loan request form. It's free of cost and obligation, so what are you waiting for? Get started today!

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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.


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