Buying Auto prior to Filing Chap 7??

[Bigfoot]

I apologize if the post already exist. My LLC crashed and is now forcing me to file. I am very embarrassed to think this is the only path I can take. I have closed my doors and owe 50K on a business line of credit. Talked with attorney who tells me "they" will come after me. He told me to throw my personal debts in. I have an older truck and know I would need a new vehicle to last the 7-10 years of bad credit. Can I buy a new truck and wait 60-90 days before filing? Anyone familiar with Arizona laws. I also have some shop equipment (worth $5k). Will they come and take this? Thank you in advance.

[ssmdem]

We bought a new car for that very reason. Our attorney saw no problem with it.

[keepmine]

Get your transpotation needs taken care of before you file.
I assume you are going to try and finance something. Just be sure you don't have equity in the new ride that is beyond your states exemption.

[AngelinaCatHub]

Yes they would probably go after your equipment. Your creditors who supply you would know what it is worth. To purchase a new car when you do not know where your employment is going to be would bother me much more than buying a beater that I can replace every other year if I had to do so. If you purchase so soon before your bk, it could be confused with some real bad planning and possible fraud unless you reaffirm the new car, then, you are stuck with it if things get really bad. I would think a bit more on your plans. Do right for you, don't just go by what others or even your lawyer tells you, but what you and your spouse can 'live with'. 'Hub

[geye]

Contrary to what I keep reading on here, our attorney advised us not to replace DH's car and to just keep fixing it. He said it could be viewed as fraud to go out and buy a new vehicle then claim we don't have the money to put toward debt.

And I can't see it taking 7-10 years to get a car loan But even if you can't, you can certainly set aside a car payment into an account every month and buy a decent vehicle in 3 years with cash.

[wow]

Hard to believe it would be fraud considering one needs transportation to and from employment. Assuming you aren't buying a expensive car and putting down a big down payment.

I'm not going to get into my case in the public but I knew someone that had two leased vehicles ,had to include in BK and financed a new vehicle prior to or during their BK.

Your allowed a vehicle or two and possibly more. Like I said I'm not going public.


Also auto loans after BK are different as far as qualifying with poor credit. I stayed current on a Audi lease during my BK after discharge ,6 months I believe, I was able to buy my Audi (07) off the lease ( I know bad idea) but car was like brand new hardly any miles residual was 18k financed through Audi for 4 years with a decent rate. I could only finance 80% of value. Just made sense.

All things are possible

[Bigfoot]

I appreciate the help, although I'm still confused. I have a great job, just don't make very much. I'm under 43K. About 10 years ago I bought a used vehicle at 18%, it about killed me to make that payment. I owed more on the truck than it was worth when I finally sold it.

It sucks that businesses who hired cheap (possibly illegal) labor are the ones who put me out of business. Companies in Phoenix could do the job (fabrication) cheaper than I could buy the steel for. Therefore the LLC took a nose dive, but believing it would eventually recover, I maxed out my credit line. Now, I personally have to go down with the business because it was an LLC.

I just want the opportunity to start another business when the economy recovers and I will need a good dependable vehicle to make that happen. I'm trying to plan ahead and I don't want to be a part of anything fraudulent.

[youngnbroke]

We had the exact same question...our lease was up in 2 months and we could either buy it out or lease a new vehicle. The car had lots of miles on it so we didn't want to pay the extra $$ for that on a new vehicle but we thought that if we were planning to file, we need a car that is going to last us a LONG time. After speaking with an atty, he said our best bet would be to turn the car in and just buy a BEATER. I was shocked. But he told us that a cheaper payment is what we need right now and actually getting a car loan after BK isn't too difficult. He said about a year after discharge, we can expect cc applications and 2-3 years after discharge we could get financed at the same rates others are getting, who haven't even filed for bankruptcy. (Granted, you work hard to repair your credit)

So if he was correct...I would hold on to that car for as long as you can...then you'd avoid any ordeal that must be dealt with purchasing a new car and then filing for bankruptcy. (But i have read that ppl do this quite often..?!)

[Bigfoot]

I want to believe this

Get your transpotation needs taken care of before you file.
I assume you are going to try and finance something. Just be sure you don't have equity in the new ride that is beyond your states exemption.

Your answer seems the most acceptable...probably because I'm being biased. My attorney did say I could have one vehicle with no more than 5K equity. If I buy a new one, my current payment will only increase about $75 more a month. I just don't know how much time before filing is appropriate. I can hold out another 3 or 4 months before filing.

[AngelinaCatHub]

I appreciate the help, although I'm still confused. I have a great job, just don't make very much. I'm under 43K. About 10 years ago I bought a used vehicle at 18%, it about killed me to make that payment. I owed more on the truck than it was worth when I finally sold it.

It sucks that businesses who hired cheap (possibly illegal) labor are the ones who put me out of business. Companies in Phoenix could do the job (fabrication) cheaper than I could buy the steel for. Therefore the LLC took a nose dive, but believing it would eventually recover, I maxed out my credit line. Now, I personally have to go down with the business because it was an LLC.

I just want the opportunity to start another business when the economy recovers and I will need a good dependable vehicle to make that happen. I'm trying to plan ahead and I don't want to be a part of anything fraudulent.

Then, you purchased the wrong car. Hey! I'm not living your life or plans but we purchased a "cherry" Chrysler New Yorker with 85K, 1989, everything worked, and ran like a top. We gave it to our god-daughter who (a drunk) trashed it.

During bk, we purchased a police car with 111k in a blind auction for $800. The next bid was $100, oh well. That was FOUR years ago. I put tires, battery, belt, alternator and a tune up on it (plugs, and oil) and it runs like a top. FOUR years for $800. If it quits, I can afford to leave it on the side of the road.

The new start is more than just planning a comfortable living. It is preparation for survival, now, more than ever.

If I could afford it, I would purchase a small diesel, stockpile fuel at today's prices as things may change very soon.

Just my opinion, and no harm meant at all in your own business. 'Hub

[lindas13]

every case is different . Nobody has the same case. So what work for 1 person may not fly with the next. The trustee looks at each case different. It depends on alot of different issues . Now if you are in harsdship taking on a car payment may not be good. But if you already have a carpayment for years whats the difference if you get a new one with the same car payment. You would still have to make the car paymant why not get a car thats going to last for 5 years . I just wouldnt file until your lawyer say to

[geye]

that might be the issue in our case. Right now we have one car payment, so if we went out and added a second, it could be seen as an attempt to reduce our DMI. And that would explain why he had no issue with us refinancing our other vehicle (to avoid cross-collateralization) because we weren't actually adding a payment, just changing where it goes.

[rck3]

See I hear this and understand about getting something new before BK but if you have something that runs fine and not extremely high miles then why? I read various posts about that but then thought in 1 year both of our cars are paid off which means we'll have another $600/month of cash for things. $600 extra means even if I had car issues I would actually have cash to pay for it or in a year would have saved enough for another used car if I wanted.

[lindas13]

I would ask your lawyer before you go out and by another car. Just make sure there is no equity . The trustee will look at everybodys case different. They look at the big picture . Your life in the last year. If you havent paid your creditors for the last 6 mo. and go out and take on debt and add another bill to buy a car I dont think thats a good idea but the best thing to do is ask your lawyer who has your case and knows your budget. All this bankrupty stuff has to the most stressful thing on earth. My daughter just finished hers and was discharged. She had over million dollar bankrupty because she had 2 houses and lots of credit card debt. and the housing market took a dive. Anyway she ignored her credors for over a year because she was to scared to face it and do what she needed to do. She had 1 company rc willey garnish her wages after 6 mo late . was it. Thats when she findly filed bankrupty. Anyway when she got her discharge papers she went to dealers around town to get anew car. Dodge -chase approved her for 12,000 at 27 percent. so she got a car and now is building her credit again. She has a really good job cocktail waitress for 4 years so maybe that why I dont know. She is learning how to live in her budget. and cant go out and buy stuff on imipulse. Her lawyer told her to go out and buy a new car before she filed but didnt and now shes paying 27 percent

[rck3]

Yeah I can see if you need a car then do it but if you don't need a car then why? We have 2 2005 cars, both look ok and have about 60,000 miles. I'm sure we'll start having issues but I doubt anything major so if we can deal with them for 2 years then we'll have saved $12,000 cash for a new one or see about a loan 2 years out of BK which at that point we have hopefully built up credit again somewhat.