If i buy a brand new car and 2 months later i file for chapter 13 bankruptcy can i keep the car and still pay?
I want to buy a new car before i file for chapter 13 bankruptcy but will that ruin the chances for them approving them ?
If you have the ability to buy a new car before filing for bankruptcy, you are not bankrupt and will probably not pass the means test.
If you have enough outstanding debt to force you to claim bankruptcy, then you probably can’t get a car loan. If you can get approved however, it is up to the bank whether they will let you keep the car and continue making payments. It’s worth a try. Worst case, you have a new car for a couple of months till they take it away.
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If you have the ability to buy a new car before filing for bankruptcy, you are not bankrupt and will probably not pass the means test.
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Actually, many attorneys will advise their clients to go ahead and buy a new vehicle before entering into a chapter 13 bankruptcy. It increases your necessary payments, and allows you to reduce your expendable income, so you end up paying less on your non-secured debt, such as credit cards.
You should consult with a bankruptcy attorney in your area to figure out if such action makes sense in your case. Your attorney will need to prepare a plan that shows you are at least able to pay your secured debts through the plan which requires going through all of your income and expenses.
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Chapter 13 FAQ: http://www.bankonitsd.com/San_Diego_Bankruptcy_FAQ_13.html
Why would you go into debt buying a brand new car if your finances are in such bad shape that you are considering bankruptcy? How about buying a decent but older used car and use the money you would have spent on car payments to pay off your debt?
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