Can You Get a Car Loan After Filing Chapter 7?

Chapter 7 bankruptcy has the purpose of allowing people overburdened by debt obligations to be legally forgiven for most of their bills. However, there is a period of time when filing bankruptcy that financial affairs such as borrowing money are the business of the federal court system, including when it comes to getting a car loan.

During Chapter 7

During a Chapter 7 case, which can take as long as eight months, you will likely be unable to obtain a car loan. This is because of court regulations as well as potential risk to a lender.

After Chapter 7

Usually, after Chapter 7 is final, you can immediately get a loan for a new or used car.

Down Payment

A down payment of at least $1,000 will likely be required for you to get a car loan after finalizing your Chapter 7 bankruptcy case.

Repossessions

Any past repossessions, even if forgiven by bankruptcy, will still be on your credit report and could affect your interest rates on car loans after Chapter 7.

Warning

You will not be able to include any defaulted car loan after your Chapter 7 case. You might have to wait as long as eight years to be able to declare bankruptcy again.

Resources

• U.S. Bankruptcy Courts