Buying or leasing new car prior to filing BK

[cyn5]

Hi - I am new to this forum and we are contemplating contacting a lawyer and figuring out if we should file bk in the next few months. I just have a question about possibly purchasing or leasing a new car prior to filing bk and how that would look to the trustee/court. We have two car leases right now and one is up in January. We were just going to turn it in and be done with it and just see if we could go down to one car. But we found out we have high milleage overage and will probably end up paying $2k when we turn our car in. However, we can cut the amt we owe if we purchase or lease another car with that dealership. Of course we would go to a lower priced car to get a lower payment, but I am concerned that if we do purchase or lease a new car a few months before filing for bk if it would look really bad for us? Any thoughts? I have read some things about before filing and one of them is to make sure you have solid transportation. Thanks!

[HHM]

There is nothing wrong with purchasing or leasing a car before BK, you are allowed to do so and it does not affect your BK.

Generally, from a financial perspective, you are better off buying a car, a used car (about 4 years old), but if you are going to try to roll mileage overages into the purchase, your only option may be a new car.

[cyn5]

Would this hurt our chances of filing bankruptcy by purchasing (financing) a new car then? We just talked to the dealership & we are actually all approved and will save $ now with a lower payment (our leased car was a luxury vehicle and our new payment on a more reasonable car will be much lower even though it is a purchase/fianaced). We obviously want to keep our cars and have reliable transportation, but will this look bad too a trustee. I can understand charging a bunch of stuff on your cards and then turning around the next day and filing bk and trying to get it discharged...but since we are purchasing a new car to get out of paying millegage on our old lease and to get a lower payment, I would think there wouldn't be a problem...but I am new to this and have no idea. Guess we will find out when we start talking to bk lawyers. Thanks!

[HHM]

Would this hurt our chances of filing bankruptcy by purchasing (financing) a new car then?

As I already said, no.

[jeb]

Just had this conversation with my Attorney this morning - he said that as long as it would reduce the monthly payments there was no problem. - jb

[2strong]

i asked my attorney the same quetsion he said it is fine to do that as long as it is a brand new luxury type car. like HHM said about 4yrs something reliable. he said your entitled to have a reliable car