Bankruptcy Auto Loans

Fresh Start Financing Program

Bankruptcy Auto Loans: After Chapter 7 or During Chapter 13

You can apply for a car loan after a bankruptcy, and sometimes while a Chapter 13 plan is still open. What changes is the paperwork: a finished case calls for the discharge order, and an open Chapter 13 case generally needs the trustee’s or the court’s approval before you take on new debt. Questions about your own case belong with your bankruptcy attorney or trustee; this page covers the car-buying side.

Apply for Fresh Start FinancingHow Fresh Start Financing works

By Dustin Schuler, Marketing Director, Bud Clary Auto Group
Reviewed October 2026. About Dustin

  • Up to 10 yearsHow long a bankruptcy can stay on credit reports
  • 2 courtsWashington’s Eastern and Western bankruptcy districts
  • Trustee firstBefore any new debt during Chapter 13
  • Lenders decideEach sets its own rules after a bankruptcy

Where your case stands changes what you bring

General information, not legal advice. Check anything about your own case with your bankruptcy attorney or trustee.

Chapter 7, discharged

U.S. Courts explains that the discharge ends your personal liability for most of the debts in the case, and that it’s usually entered 60 to 90 days after the first date set for the meeting of creditors.

  • The discharge order (a copy is fine)
  • Your case number
  • Proof of the income you have now

Chapter 7, still open

Until the discharge is entered, talk with your attorney before you sign for any new credit.

  • Your attorney’s name and phone number
  • Your case number
  • Anything your attorney gives you in writing

Chapter 13, plan running

U.S. Courts says you can’t incur new debt without first talking to the trustee, because more debt can threaten your ability to finish the plan.

  • The trustee’s or the court’s approval, in writing
  • Contact details for your attorney and trustee
  • A written vehicle price, if your attorney asks for one

Chapter 13, completed

Making every plan payment, and meeting the court’s other requirements, leads to a Chapter 13 discharge.

  • The Chapter 13 discharge order
  • Recent pay stubs or benefits letters

Washington has two bankruptcy courts, with different steps for new debt

Federal law splits the state into an Eastern and a Western District (28 U.S.C. 128). Moses Lake (Grant County) and the Yakima area (Yakima County) fall in the Eastern District. Auburn (King County), Longview (Cowlitz County) and Washougal (Clark County) fall in the Western District. Your case stays with the court where it was filed, whichever of our dealerships you buy from.

In the Western District, once a Chapter 13 plan is confirmed, Local Bankruptcy Rule 3015-2 lets you send a written request straight to the trustee for permission to finance a vehicle. If the trustee approves, no separate court order is needed; if not, you can still ask the court by motion.

In the Eastern District, Local Bankruptcy Rule 2083-1 calls for a Notice of Intent to Incur Post Petition Debt, filed with an updated statement of income and expenses, and the court decides the request if anyone objects.

Lenders have their own reason to ask for that approval. Under 11 U.S.C. 1305(c), a lender that files a claim in the case for consumer debt taken on during Chapter 13 has it disallowed if it knew, or should have known, that getting the trustee’s approval first was practicable and it wasn’t obtained.

Your attorney or the trustee’s office handles those filings. If they need details on the vehicle, our finance team can put the vehicle and its price in writing.

Five ways to get ready

None of these replace your attorney’s advice. They help a lender see the whole picture.


  1. Find your court papers

    The discharge order for a finished case, or the written approval for new debt in an open Chapter 13 case. If you can’t find the discharge order, ask your attorney for a copy.


  2. Read your credit reports

    Pull all three for free at AnnualCreditReport.com and see how the accounts from your case are listed. Federal law lets a bankruptcy be reported for up to 10 years, counted from when the case started (15 U.S.C. 1681c).


  3. Write down all of your income

    Benefits, part-time pay, a pension and self-employment can all go on the application. Regulation B bars a lender from writing off income just because it’s part-time, a pension or public assistance; the lender still decides how much of it to count.


  4. Keep the payment in line with your budget

    A lower price, cash down or a trade-in all shrink what you borrow. During Chapter 13, the trustee or the court will want to know the new payment won’t put the plan at risk.


  5. Apply when you’re ready to buy

    Credit checks from auto lenders generally count as a single inquiry if they all land in the same 14 to 45 day stretch (CFPB), so keep your shopping to a few weeks.

How a lender reads a bankruptcy

The bankruptcy is one line in a bigger file. The CFPB’s list of what lenders weigh also takes in what you earn and owe, how much you borrow and over what term, how your down payment compares with the vehicle’s value, and what kind of vehicle you’re buying, new or used.

All credit types are welcome here, and there’s no single waiting period after a discharge: each lender sets its own rules. Our finance teams ask about your case first, so your application goes to lenders that consider applicants with a bankruptcy on file.

Because our dealerships send a lot of applications to the same lenders, our finance teams can tell you before you visit which papers those lenders have been asking for on bankruptcy files. They can’t promise how a lender will decide, and approval is never guaranteed.

Choosing a vehicle that fits the plan

A used vehicle keeps the loan smaller, and ours come inspected on 137 points, with a 3-month / 3,000-mile limited warranty, the CARFAX report at no charge and a 3-day / 300-mile exchange.

Browse used vehicles on this site. If the right one is at another of our stores, we’ll move it to the one nearest you at no charge, as soon as the same day.

A negotiable documentary service fee in an amount up to $200 may be added to the sale price or the capitalized cost.

Questions people ask

  • Will a lender finance a car after a Chapter 7 discharge?
    You can apply once the court has entered the discharge; bring a copy of the order. Whether to lend after a bankruptcy, and on what terms, is each lender’s decision.
  • Is it possible to buy a car in the middle of a Chapter 13 plan?
    It can be, with your trustee in the loop. U.S. Courts tells Chapter 13 filers not to incur new debt without consulting the trustee first, and lenders generally want the trustee’s or the court’s approval before they fund the loan. Your attorney knows your district’s steps.
  • How long after a bankruptcy can I get a car loan?
    It depends on the lender, since each one sets its own rules. Credit reports can carry a bankruptcy for up to 10 years, so expect a lender to ask about it no matter how long it’s been.
  • Do your dealerships work with buyers in Chapter 13?
    Yes, our finance teams take applications from buyers with an open Chapter 13 case. Start with your attorney or trustee, because a lender will generally want the new debt approved first.
  • What if my Chapter 7 hasn’t been discharged yet?
    Check with your bankruptcy attorney first; signing for a new loan while the case is still open is a question for them. Once the discharge is entered, bring the order with you.
  • Is Fresh Start Financing part of my bankruptcy case?
    No. Bankruptcy law talks about giving debtors a fresh start, but our Fresh Start Financing Program is simply Bud Clary Auto Group’s name for how our finance teams handle credit-challenged applications. It plays no role in your case and doesn’t replace your attorney’s advice.

Related pages

Case papers ready? Pick a dealership

Choose the dealership nearest you on our Finance Centers page and open its credit application. If your Chapter 13 plan is still open, talk with your attorney or trustee first.

Apply for Fresh Start FinancingAll Fresh Start Financing options