Can I Still Get a Car Loan if I File for Bankruptcy?
July 5, 2025
Filing for bankruptcy can feel like hitting a financial reset button, but what happens when you need a reliable car to get to work or take care of your family? If you’re considering or have recently filed for Chapter 7 bankruptcy, you might wonder whether lenders will approve you for a car loan.
The short answer: yes, it’s possible to get a car loan after filing Chapter 7 bankruptcy—and often sooner than you think.
How Chapter 7 Bankruptcy Affects Getting a Car Loan
Chapter 7 bankruptcy involves discharging most unsecured debts through liquidation. The process usually takes three to six months from the filing date. Once your debt is discharged, you are no longer legally obligated to repay those debts, and you may be eligible to apply for new lines of credit, including car loans.
That said, your credit score will likely take a hit during the bankruptcy process, and lenders will see you as a higher-risk borrower. This means you may face:
- Higher interest rates
- Stricter loan terms
- Limited lender options
Still, many borrowers are surprised to learn that some lenders are willing to approve car loans shortly after discharge, especially if you can show stable income and the ability to make payments.
Tips for Getting Approved for a Car Loan After Chapter 7 Bankruptcy
If you’re looking to finance a car after bankruptcy, here are steps you can take to improve your chances:
- Check your credit report. Make sure your bankruptcy and discharged debts are correctly reported. Errors can lower your score unnecessarily.
- Show proof of steady income. Lenders want to see that you have the financial stability to make monthly payments. A full-time job with a reliable income helps.
- Consider a larger down payment. Reducing the amount you borrow lowers the lender’s risk and may qualify you for better terms.
- Avoid predatory lenders. Some companies target recent bankruptcy filers with high-interest loans or hidden fees. Be cautious and review loan terms carefully.
- Explore credit-building options. If you’re not ready for a full loan, a credit-builder loan can help you rebuild your credit and show responsible payment behavior.
While your credit score may dip during bankruptcy, it can begin to recover fairly quickly once your debt is cleared and you start making timely payments again. Many people see gradual improvement within the first year after discharge, especially if they avoid taking on unnecessary new debt.
Weigh Your Options With Insight From the Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton
Bankruptcy is complicated, but it does not have to be with assistance from the Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton. Call 800-547-4LAW (4529) or contact us online to schedule a free consultation.
We have offices in Baltimore and Owings Mills, allowing us to represent clients in Maryland, including those in Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Prince George’s County, Queen Anne’s County, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.