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August 3, 2022

How to Get a Personal Loan While in Chapter 13

Wondering how to get a personal loan while in chapter 13 bankruptcy? There might be a way.

The Bankruptcy Code allows consumers to incur some new debt while in Chapter 13 bankruptcy. However, in most cases, you’ll need written permission from the Bankruptcy Judge or Chapter 13 Trustee.

Some acceptable loans for people in bankruptcy may include:

It may makes sense to consider other types of credit rather than taking out a personal loan for bankruptcy. For example, if your financial need is temporary, you can talk to your bankruptcy attorney to help restructure your debt repayments.

If your financial need is more permanent, such as when you’ve lost your job, you may need to modify your repayment plan until you can return to work. In this case, you’ll need to file a motion with the court requesting the modification.

Remember that courts can only reduce your debt repayments toward unsecured non-priority debt, like medical bills, personal loans, and credit card payments.

You won’t be able to reduce monthly payments for secured debt like car loans and mortgages.

If you can show the court that you need the additional credit to stay on course with your plan (like the need for a reliable car to get to work), the court is more likely to permit you to incur it.

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Lorien is the Country Manager for Financer US and has a strong background in finance and digital marketing. She is a fintech enthusiast and a lover of all things digital.

Financial information reviewed byRoss Loehr - CFP®, MBA
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Last Updated: August 3, 2022

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