Auto loan during Chapter 13

[vreine]

Does anyone know how difficult it will be to obtain an auto loan while in a Chapter 13? I'm paying my current car loan (reaffirmed) outside of the Chapter 13 but it's time to trade in the car for a newer one. Specifically, has anyone had any experience doing this? I know it would've been easier and cheaper to do this before I filed. Are there dealerships/banks/manufacturers that will do this? Thanks

[elkaholic]

I'd like to know that same thing-as I may be eventually pushed into a 13 if this 7 ever gets resolved in any way.

Any experiences?

[AngelinaCatHub]

Please Ms./Mr. Vreine. Only post one subject into one discussion. It confuses many and is against the policy. Once will bring your item to most viewers. If you make a mistake, just leave it there as it will still be seen. 'Hub

[optimistic1]

The goal of the trustee is to help you stay afloat while preventing abuse of the system. This is why you will very likely be able to buy a car -- just not a Mercedes-Benz with a $1,000 monthly payment. The trustee is much more likely to allow you a payment of $200 to $250 per month for a car note.

Now, a car creates additional expenses, such as gas costs. When you talk to the trustee, you will have to present a new accounting of your income and expenses. You'll show pay stubs from your new job and your expenses estimate will be reviewed by the trustee, whether or not it was prepared by an attorney. The trustee will scrutinize it carefully and challenge anything excessive, unreasonable or out of the ordinary -- so prepare your facts carefully. If you drive a lot, you may want to bring in gas receipts to demonstrate your commuting expenses.

The hardest part may be actually finding a car that you can finance. In general, lenders do not want the payments or interest rates to be reduced by your Chapter 13 plan -- but if you are diligent, you can find a company that has a car that they'd love to get off of their lot and will meet your transportation needs. Here's what I'd do: Call every dealer in your area and explain that you are in a Chapter 13 bankruptcy for the next three to five years and that you need a car.

Or try

http://www.autocreditexpress.com/

Or

http://www.drivetime.com/

Or

http://www.carmax.com/

[vreine]

Sorry about the double post. I wasn't sure which was the more appropriate forum.

Thanks for the information optimistic. I'm currently paying approximately $500 a month for my current car. This was approved by the trustee. Do you know think the trustee will approve me getting a newer car at the same monthly payment. My current car is starting to need costly maintenance.

[optimistic1]

Its too hard to say. Was the car your paying $500 a month for in your plan, or outside of your plan?

I would say that if your trade it in, and you can somehow stay at the same amount, then they might not have a problem.

But, its anyones guess.

Have you consulted with your attorney?

And, how many more months are left in your plan?

[vreine]

My lawyer kept my monthly car payment outside of the plan so the loan was not modified in any way. I'm going to visit a few dealerships this weekend. My goal is to trade in my current car for a newer one at the same monthly payment, so I think this work. Thanks for you help Optimistic.

[optimistic1]

It should work just fine, hopefully they have some rebate specials, or they have last years models that they want to get rid of. You might have to downgrade a bit, but atleast it will be new, and with a manufacturers warranty.

[Flamingo]

My lawyer kept my monthly car payment outside of the plan so the loan was not modified in any way. I'm going to visit a few dealerships this weekend. My goal is to trade in my current car for a newer one at the same monthly payment, so I think this work. Thanks for you help Optimistic.

You need Trustee approval to purchase a vehicle during a Chapter 13 and to obtain any credit for that matter. Make sure you contact your attorney about this to get that approval because reliable/reputable dealerships won't touch you without that while you are in a Chapter 13.

[mynameainttracy]

The car we purchased 2 weeks before filing was $650 per month. We are paying it inside the plan because the trustees interest rate was less than BofA's. Nobody had any issues with that payment.

[Peevee]

That must be some nice car to pay $650 a month for.

[optimistic1]

Im surprised the Trustee would let you have a loan at $650 a month. But it was before you filed which is a different story I suppose.

[mynameainttracy]

Just a Toyota Camry. Cars have always been a weak spot with me. I don't think I have ever kept one for more than a couple of years so if I was going to be stuck with one for 5 years I was going to be happy with it. We traded in a lease to get it so there was a little neg equity rolled in, making the monthly payment higher.