The possibilities of getting a personal loan while on Chapter 13

On Behalf of | Nov 14, 2023 | Chapter 13 |

There may come a time when you want or need something that will cost a bit more than what you have available to you at the time. If you’ve gone through the Chapter 13 bankruptcy proceedings, you probably think you aren’t eligible to get a personal loan. You might be surprised when you look into this and find out what’s possible in Florida.

Bankruptcy code allowance of new debt

The simple answer to whether you can secure a personal loan while you’re on Chapter 13 is yes, in some instances. You can incur new debt under this category of bankruptcy. It is necessary to seek permission from your Chapter 13 Trustee or the Bankruptcy Judge.

There are a few acceptable types of loans you can take out under Chapter 13 bankruptcy. These include loans to pay medical expenses, settle a tax bill, or pay for a car. If you have a more temporary financial need, it’s in your best interest to discuss debt repayment alternative options with a professional in charge of your bankruptcy case.

How to handle your debt repayment challenges

The courts only are able to reduce debt repayments for unsecured non-priority debt such as credit card payments and medical bills. If you have a special circumstance that affects your ability to repay your debt according to your current schedule, such as the loss of your job, file a motion with the court to request a debt repayment modification.

Additional credit considerations

You have to put together a bit of a case to show the court that you’re in need of credit to keep up with your plan. For example, if you can show that you need to get a more reliable car to be able to keep your job, the court will likely grant you the ability to get this additional credit.

Consider your reasons for wanting a personal loan. Think about your situation and if a change to your repayment schedule would better meet your needs at this time. Contact an expert if you have important questions or need assistance with what to show in court for approval of your additional credit.