Buy a car 1 month before filing?

[coopersmydog]

Planning to file in March, in all likelyhood it will be a chap. 13. We have 2 vehicles, 1 with 140,000 miles on it, and 1 with 160,000 miles on it.

I really doubt either will make it 5 years, but I'd rather not buy two new cars right now.

Is there any issue with buying 1 car this close to filing? I've had two free consults, and one mentioned buying a car, the other did not mention it. I didn't ask either. After the wife and talked it over, it probably makes sense to get one before the credit is totally shot.

Thoughts?

[rjl0206]

From what I was told from two of the lawyers I spoken with in NJ, yes, 2 -1 month before filing is ok, its more about how much car you are buying. Dont go out and buy a mercedes and such. I am actually in the same boat, planned filing for april/may, going to buy a car probably feb. after I save up for the down. Both of the lawyers I saw said try to keep monthly car payment below 700 and I should be fine from trustee saying anything.

Ray

[mynameainttracy]

We turned in a lease and bought a new car 2 weeks before filing. The trustee didn't bat an eye at it.

[liz417]

Actually, attorneys are not able to advise you to take on more debt before you file...you have to read between the lines...our attorney "suggested" that we purchase a new vehicle before our credit was affected (we were current on everything at the time) and pay at least one payment before we filed for bk. We purchased a 07 used vehicle in May '07 and was suppose to file in July, but that date has been pushed back to either this month or Feb. (hopefully). You will need good transportation while you are in a 3-5 year repayment plan.

Good Luck!

[woeisme]

Just make sure your payments are in line with the allowances for vehicle expenses. But definitely get new vehicles. We didn't, and severely regret it. Have 2 vehicles with over 150,000 miles on them, and over 3 years left to go on our CH 13. Sure wish we had financed a couple of newer cars before filing. Now is also a good time to get deals on cars with the auto industry tanking the way it is.

[BnkrptcyLwyr]

Yes, go ahead and buy the car if you can afford it. As someone else mentioned, keep the payment low. Here in Michigan, if you were to buy a car over $500/month, you could receive an objection from the Trustee.

[ccmisery]

I'm curious, since I have a 100K mileage vehicle and need a reliable car to get to work. I'm thinking of getting a replacement vehicle prior to filing Chapter 13.

How can one qualify for a loan with high debt to income ratios, maxed out credit cards and etc? My FICO score is currently in the high 600's and I doubt I could get a loan for a $10K-12K used car with 60K miles. What interest rates are you scoring?

[liz417]

I have a 8.9% interest rate, at the time my FICO score was in the high 500's. Although I was maxed out on all credit cards, I was never late on anything (at the time). This interest rate is kind of high compared to when I purchased another vehicle the prior year at 1% interest when my Fico score was in the mid 700's
It's probably better to try to purchase a car now vs. while in a ch 13 plan, because I have read where people are paying anywhere up to 25%!
Good Luck!

[ccmisery]

I have a 8.9% interest rate, at the time my FICO score was in the high 500's. Although I was maxed out on all credit cards, I was never late on anything (at the time). This interest rate is kind of high compared to when I purchased another vehicle the prior year at 1% interest when my Fico score was in the mid 700's
It's probably better to try to purchase a car now vs. while in a ch 13 plan, because I have read where people are paying anywhere up to 25%!
Good Luck!

You bought the car while in 13 or ? If you buy before how does the courts and trustee look at it? I read mixed reports.

[liz417]

I purchased it before ch 13 (still haven't filed yet). I was told by my attorney to get a good vehicle that would last the entire 5 year plan and make a payment or two, then we would file. My vehicle had over 250K miles on it, so it would have cost more to keep it maintained within the plan. I've read a lot of comments and this seems to be the "norm"...good luck.

[catleg]

I'm curious, since I have a 100K mileage vehicle and need a reliable car to get to work. I'm thinking of getting a replacement vehicle prior to filing Chapter 13.

How can one qualify for a loan with high debt to income ratios, maxed out credit cards and etc? My FICO score is currently in the high 600's and I doubt I could get a loan for a $10K-12K used car with 60K miles. What interest rates are you scoring?

Yes you can! Try GM if nothing else....0%

[ccmisery]

New car or used car, does it matter? I thought they would look at a used car purchase better over new, but then again some of the APRs are good for new cars if you qualify.

So you get the new car, and stop paying your credit card bills? Then file ASAP? I know I couldn't afford to do both with a car payment.

[catleg]

For a 13 that's the basic playbook. No need to file ASAP. Best to "struggle" a little while.

Actually I saw a ch 13 case on Pacer which the couple owned a 900k house (800k mtg) three cars and a boat.
They surrendered the boat and an older car but kept an '08 Mercedes with a 74k loan on it (80k car).
Plan confirmed!

[liz417]

New car or used car, does it matter? I thought they would look at a used car purchase better over new, but then again some of the APRs are good for new cars if you qualify.

So you get the new car, and stop paying your credit card bills? Then file ASAP? I know I couldn't afford to do both with a car payment.

With a ch 13, there is no need to file ASAP. I got good used ('07) car(although my attorney told me to get a new car, I just felt too guilty at the time knowing that I was going to be filing BK). Anyway, there's no rush, I did this all in May '08 and still haven't filed for BK yet...
Once you stop paying your cc's, you'll have enough $$ for the new car payment. Don't rush things, plan your BK to BENEFIT you. You are going to be in this for the long-haul, so plan accordingly. Good Luck!

[ccmisery]

With a ch 13, there is no need to file ASAP. I got good used ('07) car(although my attorney told me to get a new car, I just felt too guilty at the time knowing that I was going to be filing BK). Anyway, there's no rush, I did this all in May '08 and still haven't filed for BK yet...
Once you stop paying your cc's, you'll have enough $$ for the new car payment. Don't rush things, plan your BK to BENEFIT you. You are going to be in this for the long-haul, so plan accordingly. Good Luck!

So your still paying your minimums on your cards? I live in a wage garnishment state so I know if I stop they will likely exercise their rights. Reason why I want to get a car loan before my FICO tanks due to late or defaults. I read stories they can also freeze your bank account if you stop paying.