Getting new credit or a loan during your Chapter 13 bankruptcy case is possible. In Philadelphia, in most cases if your case has not yet been confirmed and approved, you’ll have to get prior approval from the Bankruptcy Court. Once your case is confirmed and approved, the Chapter 13 Trustee will issue a letter of no objection if the loan is necessary. You will probably need to be current on your plan payments at the time the request is made. The factors that the court or trustee will consider include:
The type of credit – is it for a car that you need, such as your car is getting older and needs a lot of repairs and you need your car to get to work so that you can afford to pay your Chapter 13 in order to stay in the plan. If you take out this loan, will you still be able to afford to make your payments to the trustee or will it have a negative impact on your Chapter 13 plan – meaning with this new loan and additional payment that you will need to pay you will not be able to afford the Chapter 13 Plan.
If you can prove to the Court and the Chapter 13 that you car or other credit so that you can stay in the plan then it is likely you will be permitted to take on the additional credit.