Dear Driving for Dollars,
My Chapter 13 bankruptcy will be discharged soon. How long before I can apply for a new car loan?
Anyone who has filed for credit report. Those accounts stay there for seven years in a Chapter 13 bankruptcy and for 10 years in a Chapter 7 bankruptcy. So in your case, potential lenders will see your bankruptcy history for seven years after your filing. While there’s no set point drop in your credit score after a bankruptcy, it does carry less weight as time passes, so you’ll have an easier time getting a car loan in your last year than you will in your first.
In order to get a loan, the lenders want proof that you can pay it off so they look for a steady source of income and that you aren’t delinquent on other debt. You may be able to start re-establishing your credit with a smaller loan first. For a car loan specifically, consider saving your money so you can make a larger down payment on the car and thereby financing a smaller amount to make yourself less of a risk to a lender.
Ask the adviser