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Sometimes, regardless of how well you manage your finances, life may throw curveballs that push you into unmanageable debt. For many people, filing for bankruptcy is the best way to get out of a bad financial situation and start afresh. Chapter 13 bankruptcy is a favorable option for people with a regular income who want to pay off their debt. With chapter 13, you pay off all the debts in manageable and affordable installments. But the million-dollar question is whether you can buy or refinance a car while filing for Chapter 13 bankruptcy. This blog explains everything you need to know about the subject. Can You Purchase a Car During Chapter 13 Bankruptcy? The answer to this question is yes — you can purchase or refinance an existing car loan in Chapter 13 bankruptcy. But you need to meet some conditions to do so. First, you must have an acceptable and convincing reason to buy or refinance a car loan. The purchase or refinance must be necessary and agreeable to the creditor and the bankruptcy trustee. For example, suppose your old work transport car has been damaged beyond repair. In this case, your bankruptcy trustee may approve the purchase or refinance of the car loan since it is an absolute necessity for you to have transportation to get to work and other places. However, if your primary reason for buying or refinancing the car is leisure and luxury, then it is likely that you won't get approval from your bankruptcy trustee. How Do You Get Approval for a Car Loan During Chapter 13 Bankruptcy? Before you apply for a car loan, you must get bank approval first. But your chances of being approved depend on what you do to prove eligibility. Discover some helpful tips on getting a car loan while in chapter 13 bankruptcy. Look For a Reliable Lender You need someone willing to finance the loan despite your bankruptcy status. For example, you may work with a credit union or bank, but most banks are unwilling to lend to someone with a bad credit score. You can easily qualify for a loan or car financing from a subprime lender, as such lenders do not consider credit score to determine your qualification. Acquire a Sample Buyer's Order Your dealer will provide a buyer's order for the car you wish to purchase. This document indicates the amount you will be financing, and the court will use it to determine if you can repay the loan. To get a buyer's order, choose the type of car you wish to acquire. The secret is to pick an inexpensive car that falls within your budget. Then, ensure the order includes an alternative vehicle you can use should the court choose not to approve your buyer's order. Present the Buyer's Order to Your Trustee The trustee will assess the document and determine if the purchase is necessary and within your budget. The trustee considers factors such as whether the car is necessary and whether you can repay the loan on top of your other debts. File Motion for Additional Debt  Your trustee files a motion with the court to let you incur additional debt. The court shares the motion with creditors, who can oppose or accept it. If everything goes well and your motion is approved, you can share the approval to incur more debt with the dealer or lender. This step makes it easier for them to approve your loan, and you can then purchase the car. You may buy or refinance a car loan even during Chapter 13 bankruptcy if you have an acceptable reason to do so. Most importantly, consult a bankruptcy attorney to help you better understand the process and get your car loan approved. You can count on us at Ozment Law to help you get through your bankruptcy and financial challenges. Our lawyers are knowledgeable and experienced in this field and can assist you in filing a motion for additional debt and other bankruptcy-related matters. Contact us to schedule an appointment.