Finding an auto loan during bankruptcy

Cars lined up on a lot


When financial setbacks occur, bankruptcy is sometimes the best way forward. Life moves on and, for most people, a car is essential to that process.

But can you get a car loan while in bankruptcy? It depends, in part, on the type of bankruptcy for which you’re filing. The two common forms of personal bankruptcy are Chapter 13 and Chapter 7.


Financing while in Chapter 13 bankruptcy

Chapter 13 enables a debtor with a steady income to keep hold of property they might otherwise lose to the bankruptcy process. A plan is created to pay creditors all or part of the debt over three to five years. In this case, the debtor must get permission from the court-appointed trustee to take on new debt like a car loan. If granted, they can go ahead and look for a suitable lender that accepts applications from consumers who are going through or have been through bankruptcy.


Buying a car after Chapter 7

Chapter 7 bankruptcy is different. Under Chapter 7, a debtor’s non-exempt assets are sold and the proceeds given to creditors. The process takes about 120 days, or four months, from filing until the debts are erased and the case closed. In this situation, you may have to wait until you receive notification the bankruptcy has been discharged before attempting to get a car loan.


Building credit and shopping for loans

While it may be possible to get a car loan during bankruptcy, consider building your credit for a time before applying. A positive credit history will help your credit score, which is one of the most important factors in determining whether you’ll qualify for a loan and what interest rate you might get, says the Consumer Financial Protection Bureau.

Check your credit reports with the major credit reporting bureaus, too. Look for inaccuracies that could affect your access to credit and the best possible terms, and correct them as necessary.

Having done these things, you’ll be in better shape to seek an approval and, if approved, a better rate. Whether your situation is Chapter 7 or 13, online lender RoadLoans will only accept applications from consumers whose bankruptcy has been discharged.


A trusted, full-spectrum lender

RoadLoans is the direct-lending platform of Santander Consumer USA and has years of experience providing auto loans to customers across the credit spectrum.

Our online process is fast, straightforward and puts you at its center. You can apply from home, work or your mobile device in just a few minutes, and get an instant decision.

If approved, print the loan packet and visit your recommended dealership nearby to shop for high-quality cars, SUVs and trucks. We work with a national network of dealerships that are able to show you select vehicles meeting our standards for age, mileage and financing, so you can shop with confidence.

Apply for a car loan and get an instant decision.



These statements are informational suggestions only and should not be construed as legal, accounting or professional advice, nor are they intended as a substitute for legal or professional guidance. RoadLoans is not a credit counseling service and makes no representations about the responsible use of or restoration of consumer credit. 


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