Updated: 1 March, 2025
While bankruptcy can temporarily impact your creditworthiness, many lenders understand the challenges and offer specialized loan options for individuals in this situation. By focusing on lenders who cater to post-bankruptcy clients, you can find opportunities to finance a vehicle, often with terms designed to help you rebuild your credit. Below, we highlight some recommended lenders who have a track record of working with individuals recovering from bankruptcy, offering competitive rates and flexible terms to fit your unique financial situation.
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CarGurus
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Minimum Score: None
Recommended Gross Income: Not Specified
Qualifying Vehicles: Not Specified
Fees: None
Up to $80K
Loan Amount
Loan Term
★★★★★
APR
24 to 84 months
From: 2.8%
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Consumers Credit Union
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Minimum Score: 620
Recommended Gross Income: Not Specified
Qualifying Vehicles: Not Specified
Fees: None
Up to $250K
Loan Amount
Loan Term
★★★★★
APR
12 to 84 months
From: 6.4%
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MyAutoLoan
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Minimum Score: 600
Recommended Gross Income: $18,000
Qualifying Vehicles: Less than Ten (10) years old and less than 125,000 miles.
Fees: None
Up to $90K
Loan Amount
Loan Term
★★★★★
APR
24 to 84 months
From: 2.4%
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Auto Credit Express
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Minimum Score: Not Specified
Recommended Gross Income: Not Specified
Qualifying Vehicles: Varies
Fees: Not Specified
Up to $40K
Loan Amount
Loan Term
★★★★★
APR
24 to 84 months
From: 3.9%
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SuperMoney
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Minimum Score: 570
Recommended Gross Income: $18,000
Qualifying Vehicles: Less than Ten (10) years old and less than 125,000 miles
Fees: None
Up to $100K
Loan Amount
Loan Term
★★★★★
APR
24 to 84 months
From: 2.94%
Securing an Auto Loan After Bankruptcy
Filing for bankruptcy can make it difficult to secure auto financing, but there are still ways to get approved. Bankruptcy shouldn't stop you from striving for financial wellness. There are now several options for those who have filed for bankruptcy to get auto loans. You may qualify for lending institution programs, special financing, and credit amnesty programs. To find a dealer near you that offers Bankruptcy auto financing and get pre-qualified online.
Lower Credit: Bankruptcy undeniably affects your credit score, making you a less attractive borrower to many lenders. However, options exist for those who have filed for bankruptcy to get approved for auto loans.
Limited Options: You may be limited in the amount you can borrow, how long you can borrow it, and from whom you can borrow, You will want to consider subprime lenders or try to secure a pre-approval.
Stricter Qualifications: You may be required to make a down payment or use a cosigner to get approved. In addition, you will likely have to provide extra documentation such as proof of income and proof of residence.
The timeline for obtaining an auto loan after bankruptcy varies based on several factors, including the type of bankruptcy filed and your personal financial recovery efforts.
Chapter 7 Bankruptcy: You might be able to qualify for an auto loan as soon as your bankruptcy is discharged, which typically takes about 4 to 6 months after filing. However, it may be challenging to find favorable terms immediately.
Chapter 13 Bankruptcy: Since this involves a repayment plan, you may need to obtain permission from the bankruptcy court to take on new debt. This can be possible during the repayment period, which lasts 3 to 5 years, but it depends on your specific circumstances and the court's approval.
Auto Loan & Bankruptcy FAQs
Can You Get an Auto Loan After Chapter 7 Bankruptcy?
Yes, it is possible to get an auto loan after a Chapter 7 bankruptcy, although it may be a bit more challenging due to a lower credit scoreYou might be able to qualify for an auto loan as soon as your bankruptcy is discharged, which typically takes about 4 to 6 months after filing
Can You Get an Auto Loan After Chapter 13 Discharge?
Getting an auto loan after a Chapter 13 bankruptcy discharge can be challenging, but it is totally possible. Chapter 13 bankruptcy is discharged once you've successfully completed the terms of your repayment plan. You may need to obtain permission from the bankruptcy court to take on new debt. This can be possible during the repayment period, which lasts 3 to 5 years.
Does Bankruptcy Clear Auto Loans?
Declaring bankruptcy can clear some auto loans, depending on the type of bankruptcy filed and the specifics of the auto loan. Chapter 7 bankruptcy can result in the liquidation of assets, including vehicles, to repay creditors. However, some vehicles may be exempt, depending on their value and the debtor's equity in the vehicle.
How Long Does Bankruptcy Stay On My Credit?
Chapter 7 Bankruptcy: Up to 10 years from the date of filing. Chapter 13 Bankruptcy: Up to 7 years from the date of filing. During this time, bankruptcy can impact your credit score and make it more challenging to obtain credit or loans. However, its impact lessens over time as you rebuild your credit.
How long after bankruptcy can I apply for an auto loan?
You can apply for an auto loan as soon as your bankruptcy is discharged. However, waiting a few months to rebuild your credit can improve your chances of getting better terms.
Will financing a car help rebuild my credit?
Yes, making on-time auto loan payments helps improve your credit by building a positive payment history and diversifying your credit mix. However, missing payments can hurt your score, so choose a loan you can afford.
Are there special lenders for people with bankruptcy?
Yes, many lenders specialize in subprime auto loans for borrowers with bankruptcy. Options include subprime lenders, credit unions, online lenders, and Buy Here, Pay Here dealerships. Compare rates and terms to avoid predatory lending.
Total U.S. Bankruptcy Filings 2024: 517,308 (+14.2% YoY)
Chapter 7: About 70% of personal bankruptcy cases are filed under Chapter 7, a liquidation option.
Millennials: 13% of all bankruptcy filers are under the age of 35, with the primary causes being student loans, medical debt, and credit card debt.
Bankruptcies Involving Auto Loans: Around 10-15% of Chapter 13 bankruptcies in the U.S. involve car loans, where individuals are struggling to keep up with monthly payments.
Repossessions and Bankruptcy: 50% of people who experience vehicle repossession due to non-payment eventually file for bankruptcy.
Average Auto Loan Debt: The average amount of auto loan debt held by individuals filing for bankruptcy is approximately $15,000 to $25,000.
Chapter 7: About 12% of individuals who file Chapter 7 bankruptcy have auto loans in the mix, often leading to the surrender of the vehicle unless they can reaffirm the loan or make other arrangements.
Subprime Borrowers: Nearly 30% of car loans issued to borrowers subprime credit result in delinquency or bankruptcy.
Chapter 13 Bankruptcies: Around 30-40% of people who file for Chapter 13 bankruptcy do so with auto loans included in their repayment plans,
Chapter 13 Plans: auto loans account for approximately 18% of total debt for the average Chapter 13 filer.
Despite the challenges, obtaining an auto loan after bankruptcy is possible. Rather than applying for many loans or shopping different dealerships, you may want to drive to secure a pre-approval. When you are pre-approved your finance terms are set and you can focus on finding the right vehicle rather than being turned down for financing at the end of the buying process.
Subprime Lenders
Subprime lenders cater to borrowers with low credit scores or those who've filed for bankruptcy. While these lenders may approve your loan, they often charge high interest rates to offset the perceived risk.
Credit Unions
Credit unions might offer products to help rehabilitate your finances and could be more flexible when dealing with post-bankruptcy issues. However, they may not do business with you if your bankruptcy discharge includes debts owed to them.
Online Lenders
Online lenders could provide auto loan options for individuals with a bankruptcy history. Websites such as MyAutoLoan, SuperMoney, and Auto Credit Express cater to various credit profiles, making them potential resources for Ohio Bankruptcy Auto Loans.
