Can I Get A Title Loan While In Chapter 13?

When you’re in a tough financial spot and considering Chapter 13 bankruptcy, you might wonder if you can still get a title loan.

Unfortunately, the answer is NO. You won’t be able to get one until you’ve completed the bankruptcy process.

But don’t worry, once you’ve finished, you can come to us for a title loan whenever you need it. We’re here to help you through these challenges.

Key Takeaways

• During Chapter 13 bankruptcy, you cannot get a car title loan even if you apply for one
• Chapter 13 is available to individuals with steady income, which includes sole proprietors
• Chapter 13 might affect existing title loans, but restructuring of the payment plan is possible
• Debt restructuring spreads payments over three to five years for manageability
• After bankruptcy, you can apply for a title loan with proof of income and vehicle ownership
• To apply for a title loan during Chapter 13, you need approval from your bankruptcy trustee
• Discuss your financial situation with a bankruptcy attorney before filing for bankruptcy

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, known as the wage earner’s plan, is a legal debt relief process designed for individuals with steady earnings to reorganize their debts.

With this debt relief option, debtors can propose a repayment strategy to settle their obligations over a three to five-year period.

The goal of Chapter 13 is to provide a methodical pathway for individuals to achieve financial stability by restructuring their debts.

This provides a viable solution for handling financial challenges without the loss of assets.

How Much Impact Does Chapter 13 Have on Car Title Loans?

Filing for a Chapter 13 bankruptcy significantly impacts your chances of getting a car title loan due to the details involved. 

The Impact of Chapter 13 on Title Loans

When Applying for a Car Title Loan

During Chapter 13 bankruptcy, you can only apply for a title loan with the approval of a bankruptcy trustee. Trustees protect the debtors and creditors interest based on the legality of a bankruptcy process. Therefore, they may prevent you from getting car title loans if it isn’t the best course of action.

Involving an Existing Car Title Loan

Chapter 13 bankruptcy can come into play if you have an existing title loan. Here, debtors are allowed to include their title loan debt within a restructured repayment plan, lasting for three to five years.

The restructured repayment plan gives the debtors the option of paying the total amount owed or the fair market rate of their vehicle at the moment of filing bankruptcy.

Furthermore, it can include a lower interest rate and possibly a lower principal balance, making the repayment more affordable. You get to make specific title loan payments every month based on the set agreement.

In some cases, when debts from the loan remain after the repayment period, they may be dismissed.

An Example of How Chapter 13 Impacts Title Loans

Let’s say you want to borrow $1,500 using a title loan. You plan to pay it back in a month with a fee of 30%, which is $450, making the total repayment $1,950. But things might not go as planned.

The decision to approve your loan depends on the trustee. They check if your repayment plan is realistic. If the $450 fee is too much for you or the trustee thinks the loan isn’t a good idea, they might reject your application.

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

How to Get a Title Loan after Bankruptcy

Trustees don’t have a say in whatever debts or loans you take on after your bankruptcy has been discharged. Therefore, you can secure a title loan after bankruptcy by going through an uncomplicated process designed to provide swift financial relief.

Although your bankruptcy record will be reviewed, the key factors for approving your loan are your steady income¹ and a car with good equity.

Secure a Title Loan in 3 Simple Steps

1.     Fill out our straightforward online application within 5 minutes.²

2.     Submit the necessary documents, like your car’s make, model, and mileage.

3.     Receive your money possibly on the same business day via your preferred option².

Requirements for Securing a Title Loan after Bankruptcy

Having these documents below ready will make the loan approval process smoother, enabling you to access the funds you need today:

• Proof of sufficient income
• Proof of Identity (Government Issued-ID)
• Proof of Residency
• Car title (your name attached)
• Photos of your car’s interior and exterior to ascertain its true value 

Bankruptcy Filing: Contact a Bankruptcy Attorney

Reaching out to a bankruptcy lawyer for expert advice is a smart move if you’ll be filing a bankruptcy case. 

But while at it, ensure you’re transparent with them on matters relating to your assets and liabilities, including your car title loan debt.

An experienced bankruptcy attorney serves as a guide, walking you through the bankruptcy filing process. They can recommend the best-suited bankruptcy option for you, depending on the information you provide.

Hence, providing misleading information can lead to undesirable scenarios, like bankruptcy case dismissal, fines, prison time, or loss of protection (offered by the court to bankrupt individuals).

FAQs

Can I Apply For Personal Loans While in Chapter 13?

Yes, there’s a possibility of getting a personal loan while still making repayments in your Chapter 13 bankruptcy plan.

But it can be a tough ask because of the effect of the bankruptcy on your credit score.¹ And in cases when you qualify for a loan, you still need to get a go ahead from the court.

Can I Keep my Car Without Bankruptcy Filing?

Yes, you can keep your car without filing for bankruptcy by making monthly payments⁴. Missing a month (s) of payment increases the chances of a car title lender repossessing your vehicle.

However, if you’re struggling to pay, inform your lenders and ask for an extension or favorable repayment plan.

Can I File Bankruptcy on a Title Loan?

Yes, you can. But it’s worth noting that the title loan will be handled based on the bankruptcy type.

For instance, if you file for Chapter 13 bankruptcy, you may be able to reorganize your debt to make it more affordable.

What Happens If You Apply For Credit During Chapter 13?

During bankruptcy, you can apply for credit only with the permission of the Chapter 13 trustee or bankruptcy judge.

Going ahead to apply for credit without the necessary approval is considered a violation of bankruptcy laws and may lead to any of these unwanted consequences:

• Rejection of credit application by lenders
• Immediate dismissal of bankruptcy case
• Potential fines, penalties, or other legal actions

How Long Does it Take to Get Credit after Chapter 13?

Chapter 13 will continuously appear on your credit report 7 years from the date of filing and isn’t discharged until after repayment of debts. Hence, your chances of getting traditional credit or loans within this period is slim.

Final Words

Indeed, you can’t get title loans while you are in bankruptcy according to the laws of the bankruptcy court. But not to worry, you can secure a loan after you complete payment to your lender and escape the watchful eyes of the bankruptcy trustee. And when this time comes and you need cash quickly⁴, we’ll be ready to welcome your loan application with open arms and possibly grant approval.

Feel free to fill out our simple application² if you’ve been discharged from bankruptcy and need a loan. Not sure about your eligibility for a title loan? Don’t stay in the dark. Reach out to us today to clear the air.