Gettting a Car Loan During Bankruptcy
If you're filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy you may be wondering about your access to credit, especially if your current car is on the blink. Well, the good news is that a debtor can usually get a car loan in both Chapter 7 bankruptcy and Chapter 13 bankruptcy depending on a few factors.
If a debtor is filing Chapter 7 bankruptcy and needs immediate credit for a car loan, they will need to wait until they have attended the 341 Meeting or what is better known as the meeting of the creditors. Some car financers won't consider extending credit to a debtor unless they had the 341 Meeting while most prefer that the debtor wait until they have received their bankruptcy discharge before attempting to apply for a car loan.
If a debtor is in a Chapter 13 bankruptcy they will need to get the permission of the bankruptcy trustee before they can apply for a car loan. Chapter 13 bankruptcy debtors are not allowed to take on any type of additional debt unless it is approved the bankruptcy trustee. Also, the bank issuing the car loan will require that the debtor present proof that they have permission of the bankruptcy trustee before they will issue a loan. The bankruptcy trustee will issue an order approving the debtor's request to take on a car loan and he/she will specify the maximum amount of the loan and the maximum interest allowed. The car financing company will use this court order to help them determine the best type of car loan to issue.