If you have filed for Chapter 13 bankruptcy protection yet need an auto loan, you will need to speak to your court-appointed bankruptcy trustee.
Bankruptcy Trustees and Auto Loans
To get an auto loan while in the process of filing for bankruptcy, you will need to obtain an “Order to Incur Additional Debt” from the bankruptcy court. To obtain this form, you will first need to obtain a financing estimate from an auto dealership.
Your court-appointed trustee will then file a proper motion with the court. The motion must include details of why you are in need of an auto loan, and how you will manage the payments. Here are the things you must discuss in your Order to Incur Additional Debt
In order to grant the motion, the court will need to know what car you are looking to obtain financing for. You will need to provide information such as the year, make, and model of the vehicle.
It is essential that you do not attempt to purchase an expensive or eye-catching car at this time. If the court feels that you are not in need of that vehicle, they may deny your motion.
Set a Budget
You will need to explain to the court how you will manage to make your auto loan payments while undergoing bankruptcy. Create a budget for yourself that also includes the cost of vehicle ownership.
Explain Your Need for a Car
You will need to tell the court why you are in need of an automobile. It could be because your old car was totaled or had major mechanical issues. Whatever the reason, you must be sure that your choice of vehicle is practical.
Once you have all of your forms ready for your bankruptcy trustee, you can ask your trustee to approve you for an auto loan. Although the trustee may have questions, its essential that you answer them openly. Within a few weeks, you will be contacted by your bankruptcy trustee to see if your Motion to Incur Additional Debt was approved or denied.
If you are looking to buy a new car but have less than perfect credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!