Question About Taking Out a Car Loan While in Chapter 13

[switch625]

If you want to do this correctly, the insider (family, friend, etc) should treat this as any other secured debt. You should complete a promissory note pledging the vehicle as collateral and the insider should keep the possession of the Title with them listed as the lienholder.

Thanks JB, I thought that this would be possible steps to take as well.

[justbroke]

You would need to see the process for your specific Chapter 13 Trustee. Many will want not only the Motion to Incur Debt, but the Trustees typically have a form. The form typically includes the prices of the vehicle and then calculations on the impact to your Chapter 13 Plan.

If you want to do this correctly, the insider (family, friend, etc) should treat this as any other secured debt. You should complete a promissory note pledging the vehicle as collateral and the insider should keep the possession of the Title with them listed as the lienholder.

[switch625]

If the car loan loan is from an individual (family member, relative, friend) and not a financial institution, what other requirements or documentation might the trustee or the BK Court require other than the Motion to Incur Debt/trustee approval, a vehicle purchase order? Just looking to see if loans from those sources are treated differently than those from financial institutions.