Unique situation, I think?

[Lissy]

I did a search on this, but couldn't find anything that fit my situation. I filed Chapter 13 end of February. I am not confirmed yet and have not even had my 341 (scheduled for early April).

This past Friday, I was in a serious car accident. My car was totaled (not my fault, other driver received a ticket). Obviously, I need a new car now. I notified my atty this morning and he said since I'm not confirmed, I can go out and get a new car and he doesn't think it will be a problem. He's checking to make sure and said he would let me know if there would be an issue with doing that.

Problem is, my credit is shot. I'm *hoping* that my insurance payout will be more than I owe on the car and give me a nice down payment. The car was only 3 years old, in excellent shape, though it did have 100k miles on it. If not, I may be able to use my work bonus, which I have not touched because I wasn't sure if the trustee would want it. My parents are also willing to co-sign on a loan. My credit with the leinholder is perfect, never missed a payment and I had another car with them 2 years ago that was paid off early. I'm not sure if that will be enough for them to finance me though. Does anyone know if I would be allowed to have a co-signor? Anyone have experience buying a car in Chapter 13? How difficult is it? TIA!

[SMinGA]

You can check with Roadloans.com - if approved it would give you a list of locations that they work with, max loan amount, and cash payment amount required. The downside is the BK is on your credit, so will affect APR. Find out from your atty if it would be possible to include the new loan in the filing @ your district's till rate. If so, then it won't matter what APR you get.

Did you have gap insurance on your vehicle, or have a decent downpayment? If not and it is worth less than owed the deficiency balance should go in as an unsecured debt.

[Lissy]

I'm not too worried about the APR, I know it will be high. I'm not going to get an expensive vehicle, but I do need something that will last me the 5 years. Getting financing is what concerns me. If I can, I'd like to let my parents co-sign, but only if that will help given the BK on my credit. Not sure if that will screw up anything related to the BK or cause issues for my parents.

No gap insurance and no down payment, BUT when I bought the car 3 years ago, I got a 4-year, 0% interest loan. So I only had one more year to go to pay it off. According to Kelly Blue Book, it's worth $4k more than I owe, but I don't know how insurance determines value.

[nsupanda]

I'm sorry, I may be stupid for asking, but if your parents co-sign with you before you are confirmed, won't the car loan company come after them after your bankruptcy is confirmed?

[Lissy]

I'm sorry, I may be stupid for asking, but if your parents co-sign with you before you are confirmed, won't the car loan company come after them after your bankruptcy is confirmed?

I wouldn't think so. They would have no reason to do that. I will be making the payments, one way or another (either myself or through the plan).

I found out today I'm getting $4k more than I owe on the car, so that will be a nice down payment on a new one. I was also approved for a loan through RoadLoans.com. However, they do say they need a letter from the trustee for bankruptcy cases, so I need to get that. I called my atty to let him know about that requirement. Hopefully, it won't be an issue.

[SMinGA]

Sounds like you were in good shape on the now-totalled car. Most are not 3 yrs into a new auto!

The letter from the trustee also should be pretty basic. Simple situation: you had a car w/ payments. Now you don't, thru no fault of your own and so need to replace it. The insurance check will certainly help.

NSU-there is nothing for the creditor to 'go after' a co-signor over. The loan would be paid according to the terms.

[justbroke]

I'm glad to hear that your insurance settlement more than covers the car, and that RoadLoans approved you! Yes, you need Trustee approval and your attorney can quickly do this with a letter explaining the situation. He'll also ask for permission to use the proceeds of the insurance settlement. You should apply the settlement to the "new" car. Also, don't buy a "new" car! But you probably already know that. You should purchase a good used card... no more than 2 model years old, so that it lasts through your Chapter 13.

[Lissy]

Why should I not buy a "new" car? I was actually planning to if I can, just because I do need it to last for the next 5 years.