How to buy a car during a Chapter 13 bankruptcy

A Florida resident who files for Chapter 13 bankruptcy will enter into a repayment plan lasting between three and five years for the debts that are owed. The repayment plan is overseen by the bankruptcy trustee, and any new debt that the filer wants to incur during that time must first be approved.

In some cases, people in Chapter 13 bankruptcy will find themselves needing to purchase a new vehicle. In some cases, the vehicle they owned at the beginning of their bankruptcy case will give out. In others, they may need to add a second vehicle for their spouse to use due to a new job or new obligations.

It is not impossible to get approval to purchase a car while in a Chapter 13 repayment plan period. It is important for people to do things correctly, though, so they don’t jeopardize their Chapter 13 case. They should start by getting a sample contract from a car dealer that indicates the type of car to which it would apply. They then should take this to the trustee. The trustee will notify the person’s creditors, and the creditors will have a chance to object. There may be a hearing scheduled at which the debtor will need to answer questions regarding the need to purchase a car. Debtors should not try to take shortcuts by getting a loan without approval. This could result in the dismissal of their Chapter 13 case.

While the repayment plan may place people on a strict budget, it is still possible for them to purchase a different car if they need to do so. They must simply make sure they follow all of the required steps and secure the approval of the court before making any purchase. It is advisable to speak with a bankruptcy lawyer during the process as well.