Categories: Chapter 7 Bankruptcy

How to Get a Car Loan During Bankruptcy

Bankruptcy is a powerful tool that allows debtors to get a fresh start. What about a debtor that needs to get a new car loan in the middle of a bankruptcy? It may come as a surprise, but it is absolutely possible. Read on to learn more.

What Happens to Car Loans After a Bankruptcy is Filed

Debtors have the opportunity to decide what to do with their car loans during a Chapter 7 Bankruptcy. A debtor can keep their car and maintain payments. A debtor may also surrender their car and escape financial liability on the loan.

Surrendering a car during bankruptcy is a great idea, especially if the terms of the loan aren’t ideal. For example, a high interest car loan with lots of negative equity is the type of car loan that should be surrendered during bankruptcy.

Careful pre-petition planning ensures that a debtor receives the best possible benefit from a bankruptcy.

It is Possible to Get a Car Loan During Bankruptcy

If a Debtor surrenders their car during a bankruptcy, how is that person supposed to get around? Many debtors are surprised to hear that it is possible to get a car loan even while a bankruptcy case is pending.

That’s right. There is no legal prohibition against obtaining new credit even before a bankruptcy case concludes.

Practically speaking, it may be difficult to find lender willing to let a debtor borrow money while in the middle of a bankruptcy. But I have personally seen it happen. So I know it is possible. This is another area where careful preparation and homework will pay dividends.

Don’t Let a Bad Car Loan Follow You After Bankruptcy

As discussed above, there are options for debtors that need to surrender a bad car loan during a bankruptcy. It does not make much sense to get a “fresh start” in a Chapter 7 only to emerge from bankruptcy with the same bad car loan.

I encourage all potential bankruptcy filers to carefully review their car loan situation prior to filing a Chapter 7 bankruptcy. There are opportunities out there to save significant money!

There are many benefits to filing Chapter 7 bankruptcy in Sacramento. Please call my office at (916) 333-2222 to schedule a consultation today!

Attorney Rick Morin

Share
Published by
Attorney Rick Morin

Recent Posts

Outdoor Dining Tables are a New ADA Lawsuit Trap

Prolific filers of ADA lawsuits in California are always looking for something new to sue…

3 years ago

Scott Johnson Criminal Case Update

Most people know by now that serial ADA lawsuit filer Scott Johnson was indicted by…

4 years ago

ADA Website Lawsuits: A New Frontier in California

By now most business owners in California know that their businesses must comply with the…

4 years ago

How To Stop Wage Theft in California

Wage theft happens all of the time in California. For many reasons, wage theft is…

4 years ago

How to Calculate California Overtime

Calculating overtime pay in California can be tricky. Unlike Federal law, overtime in California is…

4 years ago

Jose Velez Scores a Win in the 9th Circuit

Jose Velez is a relatively new entrant to the world of frequent ADA litigation in…

4 years ago