Can I Get a Title Loan While in Chapter 13 Bankruptcy?

Since the rise of inflation is greatly affecting the current cost of living across the nation, financial instability is an issue that many Americans may face at some point in their lives. It’s understandable if you decide to declare Chapter 13 bankruptcy in order to get debt relief. If you are searching for extra cash to manage your expenses, you may have come across a secured loan option called a title loan. Title loans typically cater to borrowers with subprime credit scores, but in order for an individual to qualify for this loan option, they will need to pledge their vehicle’s title as collateral for the loan.1

You might be asking yourself, “Can I get a title loan while in Chapter 13 bankruptcy?” The answer is no – you can’t get a title loan while in active Chapter 13 bankruptcy. Your current bankruptcy must be fully discharged or dismissed before you will be able to apply for emergency funding through a car title loan. Some lenders prefer that you wait six months after your bankruptcy has been dismissed or discharged before you can apply for a title loan, but others have no preference about the amount of time that has elapsed since your bankruptcy proceedings were finalized.

To understand why you’re restricted from obtaining a title loan, you must first understand how bankruptcy works and why most title loan lenders refuse to approve applicants who are in active bankruptcy. Chapter 13 bankruptcy is a specific type of bankruptcy that allows individuals with regular income to restructure their debts, develop an effective repayment plan, and hopefully get a fresh start with their finances.

During the Chapter 13 bankruptcy process, you are required to make monthly payments to your creditors for about three to five years. Upon the completion of your three or five-year commitment period and full compliance with all payments outlined in your Chapter 13 plan, the bankruptcy court will eliminate any outstanding non-priority debts that were not fully repaid. This process is commonly referred to as a bankruptcy discharge.

While getting a title loan during Chapter 13 bankruptcy is downright impossible, you could apply for a ChoiceCash title loan after your bankruptcy has been discharged! Dial 855-422-7402 to speak to a ChoiceCash title loan agent and learn more about getting car title loans after bankruptcy.¹

Can I Get a Title Loan While in Chapter 7 Bankruptcy?

title loan while in chapter 13

Now that you know more about the restrictions of Chapter 13 bankruptcy with car title loans, you might wonder if the same principle applies to a bankruptcy under Chapter 7. You might be asking yourself if it is possible to get a title loan while in Chapter 7 bankruptcy. Before you can get an answer to this question, it is important to understand the key differences between Chapter 7 and Chapter 13 bankruptcy.

Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy does not involve a monthly repayment plan. Instead, Chapter 7 bankruptcy entails the sale of your nonexempt assets or property in order to repay your debt obligations. In exchange for selling your assets to pay off your creditors, you will be granted a bankruptcy discharge for most of your debt obligations. You will however not be able to discharge alimony, certain taxes, or child support payments.

Additionally, depending on your income, you may need to pass a bankruptcy means test in order to find out if you can file for Chapter 7 bankruptcy instead of Chapter 13 bankruptcy because the latter is an option for individuals who earn a regular source of income and just need more time and structure to repay their debts. Chapter 7 bankruptcy is an option for individuals who earn little to no income and can’t realistically afford to pay their debt obligations.

Although you may be able to clear your debts faster with Chapter 7 than with Chapter 13 bankruptcy, you cannot apply for a title loan while in active Chapter 7 bankruptcy.

Can You File Bankruptcy on a Car Title Loan?

If you are struggling financially during the repayment process, you might be asking yourself if you can file bankruptcy on a title loan.

Chapter 7 bankruptcy will usually only discharge unsecured debts, like personal loans, medical debt, and credit card bills. Since title loans are secured loans, and you are required to use your vehicle title as collateral for the loan in order to receive funding, a title loan cannot be discharged under Chapter 7 bankruptcy. You can choose to pay the title loan in full or discuss other options with your lender if you cannot manage your monthly loan payments. If you miss an installment and default on your title loan, the lender can legally repossess your vehicle and sell it at auction in order to cover the remaining balance of your loan.

If you choose to file Chapter 13 bankruptcy, you will still need to repay your title loan, but you may be able to lower your monthly installments in order to make them more manageable. Additionally, if your current interest rate is too high and expensive, you may be able to reduce the rate if you are in active Chapter 13 bankruptcy. It’s important to keep in mind that even if you file for Chapter 13 bankruptcy, there is still a chance that you may lose your vehicle if you don’t make payments according to the court-approved payment plan. However, you can explore multiple options to restructure your debt and potentially avoid repossession.

If you are currently struggling with your loan payments but your account is still in good standing, you can try to refinance your current title loan in order to potentially obtain better loan terms! Contact a ChoiceCash title loan agent at 855-422-7402 if you have questions about refinancing your current title loan.1

How Can I Get a Secured Loan After Bankruptcy?

title loans after bankruptcy

Looking for more information about how to get a secured loan after bankruptcy? Although you may need to wait a few months to apply for certain title loan options after your bankruptcy is dismissed or discharged, you don’t have to wait at all in order to apply for a ChoiceCash title loan serviced by LoanMart! As soon as your bankruptcy proceedings are completed, you can submit an application online or over the phone by calling 855-422-7402.1

Below is a list of initial criteria you will need to meet in order to get a secured title loan after bankruptcy:¹

  • Be of Legal Age to Apply for a Title Loan
  • Have a Title to a Qualifying Car or Truck in Your Name
  • Demonstrate Your Ability to Repay an Auto Title Loan

The initial requirements for an auto title loan do not include proof of traditional employment, but you must provide a qualifying document that proves your ability to repay the loan during your application. Additionally, your vehicle must have a decent amount of equity, and the title must be in your name in order for your car to qualify as collateral for a title loan.¹

If you don’t know the current amount of equity in your car, you could use ChoiceCash’s title loan calculator to acquire an equity estimate and a loan quote with no obligation. Simply enter a few basic details about your vehicle and yourself into the online calculator and find out if you are prequalified for a car title loan!¹

If you’re eligible for a ChoiceCash title loan, you can access competitive interest rates and get your funding in as little as 24 hours!¹ Call a ChoiceCash title loan agent at 855-422-7402 if you have any questions about applying for a title loan after bankruptcy.

Where Can I Apply for Title Loans After Bankruptcy?

title loan while in chapter 7

Looking to get a title loan after Chapter 13 bankruptcy? With ChoiceCash title loans, you don’t have to leave your home to apply for emergency funding! Just call 855-422-7402 to start the application process or fill out a short pre-approval form to apply online. If you qualify, you can choose direct deposit or have the funds added to your debit card to get your money in as little as 24 hours!¹

Sebastían S.
Sebastían S.
Sebastían S. is a graduate of Texas State University and a contributing member of the ChoiceCash content team with over two years of experience in the financial services industry. As a proficient digital content writer, his writing style combines transparency and expertise in order to make complex financial topics accessible to a wide audience. Whether the topic is about title loans, debt management, or budgeting, Sebastian's objective is to provide readers with accurate and relevant information that is easily understood. Find him on Linkedin.