Buying a new car is stressful enough under normal circumstances. Add in a recently filed bankruptcy, zero dollars down, and a $90,000 price tag into the mix, and you've got what seems like a recipe for financial disaster. In a viral TikTok with more than 3.8 million views, a car salesman for Liberty GMC (@libertygmcid) posted a phone call he purportedly had with a potential customer inquiring about a Hummer EV on the lot. The call started normal enough, the customer wanting to know if the dealership could knock a grand off the sticker price. The finance manager countered that it was already $13,000 off and steered the conversation toward a credit application. "I just filed bankruptcy about a week ago," the caller says in the recording. "I started this business so that I can finance this truck for it." The finance manager explains why neither the personal nor the business credit route is going to work, noting that the business is brand new with no established credit history. The personal situation is, well, fresh off a bankruptcy filing. He tells the caller, "With you having just filed bankruptcy, I'll just tell you straight up, I mean, we can do a credit app, but the odds of you getting approved are extremely low." The caller explains he thought he could buy any new vehicle and write it off and keeps insisting they just submit the application. "I don't think you have a very good chance of getting approved, just being straight up with you," the seller says, adding that he wouldn’t feel good about submitting it, but does it anyway at the guy’s insistence. "Bankruptcy last week and casually shopping for a $90K truck this week. That's either elite confidence… or the boldest strategy of the year—which one is it?" @libertygmcid says in the caption. People who commented on the post were very suspicious of the buyer’s intent. “He’s actively trying to commit fraud,” one opined. “Technically he's trying to commit fraud because of the bankruptcy court finds out,” another agreed. A third questioned his negotiation tactic, writing, “What’s $1,000 going to do for a 90k vehicle.” What Happens To Your Car Loan If You File Bankruptcy? Many people falsely believe that bankruptcy simply erases car loans and lets you drive off free and clear. According to an attorney writing for Nolo, while bankruptcy does discharge the loan contract itself, it doesn't touch the lien—the lender's legal right to repossess the vehicle if you stop paying. So even after filing bankruptcy, if you want to keep the car, you still have to pay for it. Whether you can hold onto a vehicle through bankruptcy comes down to a few things: how much equity you have in it, whether your state's exemption covers that equity, and whether you're current on payments when you file. Fall behind and the lender can petition the court to repossess. Chapter 7 bankruptcy can liquidate assets to repay creditors, while Chapter 13 bankruptcy sets up a three-to-five-year repayment plan that lets you catch up on missed payments and potentially keep the car. Neither version is a free pass. And as for the broader credit damage, per Experian, Chapter 7 stays on your credit report for 10 years, Chapter 13 for seven. During that stretch, lenders, landlords, and creditors can all see it. Even if someone does approve you for something, expect higher interest rates and stricter terms across the board. Can You Get A Car Loan After Bankruptcy? It's not impossible to finance a car after bankruptcy, but it takes time, and there are no shortcuts. Chase lays out what the road back actually looks like: Work on rebuilding your credit first. Pay bills on time, keep card balances low, and avoid piling on new debt. It takes months, sometimes years, but it's the only real path to better loan terms. Save for a down payment. A significant down payment lowers the lender's risk and reduces what you need to borrow. It also signals you're in a more stable place financially. Consider a co-signer. Someone with solid credit co-signing the loan can significantly improve your odds of getting approved. Shop around. Don't accept the first offer. Compare terms from multiple lenders before committing. Motor1 reached out to Liberty GMC via email and TikTok direct message for comment. We'll be sure to update this if they respond. We want your opinion! What would you like to see on Motor1.com? Take our 3 minute survey. - The Motor1.com Team
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