We Need to Buy a Car While in a Chapter 13 Bankruptcy. How Do We Do This? – Kevin

“Dear Lewis,

Filed bankruptcy (Chapter 13) 6 months ago and have found ourselves in a difficult situation. Our car has broken down to the point that it is not worth fixing.

We need to get a new car but with our recent bankruptcy, is it even possible; and if so, will our chapter 13 payments be adjusted to reflect the new outgoing amount we will be paying in bills each month?



Dear Kevin,

Every bankruptcy court and chapter 13 has their nuances in how they want this handled.

But just about every chapter 13 trustee is going to require you to get approval to purchase a vehicle – whether it is for cash or financing.

You will be pleasantly surprised in lots or dealers that will be willing to lend. This is also why the trustee wants you to get it approved – so you don’t get taken advantage of. Our trustee will make debtors try harder to get better terms (which they usually can) when the first lender tries to bite off too much in interest or price.

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Generally speaking, you need to shop for the deal. Get it in writing from the dealer or lot. Then submit it to the trustee for approval.

Also, the trustees generally will allow you to replace a car payment with a similar car payment. Also, the trustees will let you take on a new car payment when you didn’t have one before, as long as the payment is reasonable.

It wouldn’t be fair for people with car loans to qualify for bankruptcy from the beginning, but not allow people with no car loans in the beginning to not be able to get one during the plan, if it was needed.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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