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    buying a new car

    ok here's another question i've got:

    doing chapter 13 in about 5 months.

    i have a new car bought in (8/10) payment is 310, looks like exemption can be up to 496 a month.

    As is now, doing the means test calculator it's saying my DI is around 1500(this works out to around 90% payback).

    I have another car that is paid for (2002) and worth probably around 4500. I'm worried this car will break down during the chapter 13. My credit is still good enough to get one of these 1.9 percent interest deals on a brand new car. I'd like to trade my car in and buy a new car. The payment on he new car would be around 375-400. I can exempt upto 2 car payments, so this should be exempt. However this will lower my DI to 1100 causing my unsecured creditors to get less paid back.

    since this will lower the amount my unsecured creditors get (but still more than they would of in a chap7) will it be considered fraud?

    #2
    Buying a reliable car before filing a 5-year Ch 13 isn't fraud - it's called darned good bk planning! Just don't buy a new Mercedes

    Do discuss this purchase with your lawyer before proceeding. The new car might impact your Ch 13 disposable income calculations in unexpected ways. Better to be safe than sorry.
    I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

    06/01/06 - Filed Ch 13
    06/28/06 - 341 Meeting
    07/18/06 - Confirmation Hearing - not confirmed, 3 objections
    10/05/06 - Hearing to resolve 2 trustee objections
    01/24/07 - Judge dismisses mortgage company objection
    09/27/07 - Confirmed at last!
    06/10/11 - Trustee confirms all payments made
    08/10/11 - DISCHARGED !

    10/02/11 - CASE CLOSED
    Countdown: 60 months paid, 0 months to go

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      #3
      yeah i'll basically be trading in my 2002 crv (worth around 5k) for a 2011 crv that's around 22K, so about 17K financed. nothing fancy, just something for the wife and kids.

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        #4
        You may want to consider selling the crv for cash and using it on living expenses and such & financing the full purchase price of the newer car.
        Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
        0% payback to unsecured creditors, 56 payments down, 4 to go....

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          #5
          i thought about that too.

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            #6
            well, i talked with my lawyer and they said it was fine. I bought the car today and financed the entire thing. Now to sell the existing one.

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