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Bankruptcy: Can I still apply for an auto loan?

Under some circumstances, yes, you may be able to get financing for a new car prior to your bankruptcy being discharged. While the whole point of filing for bankruptcy is to emerge debt free, having a car is a necessity for most people. Like many other North Carolinians, you likely rely on your car to take you to work. Your income from that job is what you need to make monthly payments under your repayment plan. Therefore, if your car dies and you have no other means of travel, the court may allow you to apply for a loan to obtain a new vehicle.

First and foremost according to Autos.com, you will need to consult with the bankruptcy trustee to get permission before trying to get financing for a new car. The trustee will likely only approve certain lenders and buying a new vehicle without his or her knowledge could have a significant adverse effect on your bankruptcy.

You will also need to consider the timing of your loan application. Applying for a loan before  your debt repayment plan has been implemented will most likely lead to your application being denied. Finally, if the trustee does determine that buying a car is a necessity it does not mean that you can then go pick out just any car. While you may have your eye on a luxury SUV, you may be stuck with a practical sedan as the trustee will probably set a price limit on how much you can borrow.

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