Here is what's going on. My wife and I filed for a chapter 13 last year. It was confirmed and payments started to come out of my check. My wife was not working at the time. Recently, she found a job and needs a car. She travels alot, and mine won't last much longer. I called my lawyer and they said there should'nt be a problem getting it approved by the court. Has anybody bought a car during a chapter 13? What can I expect when trying to buy one, besides a high interest rate? Is it even possible to obtain a loan in this situation?
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My experience:
I was in the same boat recently. I contacted MANY loan companies that said they offered loans while a person was in BK, but what I found was that every single one of them required a discharge before they would even talk about financing. Good luck though.
Whatever you do, make sure you get your trustee to send you an application to incur more debt. I think the trustee will dismiss your BK if you get a car without telling them and they find out. Then again, my trustee (and the entire office) is functionally retarded, and would never be able to catch me. Your mileage may vary.
When you get the lender to fill out the terms of your loan and sign it, then you have to send it back to the trustee for approval. I've been told that this process takes over a month. Remember, when the trustee wants something from you, it's "RIGHT NOW" but when you need something from them, it's "WHENEVER THEY GET AROUND TO IT". -
You are exactly right. I spoke to my lawyer again, and they said it could be several weeks before they approve it. They did tell me something interesting. If you use on the lot financing or buy here pay here you don't need the courts approval. Sounds odd to me, but they said it has nothing to do with the court. I have looked into some of these lots, alot of them offer 2000 year model and up cars with decent mileage on some. The interest rate ranges from 15% to 25%.
My wife called one of them, and they approved her for a loan. Just need paystubs and utility bills and $500 down. This is still a debt, so I am going to look into it more before we do anything.
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You may want to run that idea by someone else. My understanding is that if you intend to incur ANY financing, regardless of who it's through, you need approval 1st.Comment
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I would be careful with that---the NOLO book we read on chapter 13 said
that was a common trick of the car dealerships and NOT to fall for it. So I would double check to be sure......Comment
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I intend on speaking to my lawyer more about this. After all, with my wife working now, I would want the court to know about a car payment. If not, they will want to take all her income to use in the plan. If she's making a car payment and insurance that I can use as an expense, it shouldn't raise the payment up as much.Comment
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