Loan before Ch13

[spearmint]

What happens if you take out a loan a few weeks before filing Ch13? This would be for a secured item.

[Nicollette]

I'm not positive about this, but I would think that when the lender get's notice of the BK filing, they could look at this as fraud for the fact that you took out the loan, knowing you would be filing in a couple of weeks.

[spearmint]

I'm not positive about this, but I would think that when the lender get's notice of the BK filing, they could look at this as fraud for the fact that you took out the loan, knowing you would be filing in a couple of weeks.

Loan was the wrong word. It would be a purchase of a secured item - not a vehicle and about 5K.

Can't I pay on it even though I would be in Ch13? I would not want to "get rid of the debt".

[justbroke]

Let's backup a little. What did you purchase? What type of loan was it?

If it's secured property, it isn't considered fraud. That's because the item you purchases, secures the loan. If you used your VISA to purchase a motorcycle just before filing (within 90 days), now that's presumed to be non-dischargeable.

We would need to know just what type of credit product you used to purchase this property. Was it a credit card? If so, was it a store card or VISA/Mastercard/AmericanExpress? If not, was it a loan? If it's a loan, what type of loan? For example, was it from CitiFinancial or HFC or HSBC?

The credit product is going to determine my answer for you.

[spearmint]

I haven't purchased anything at the moment. I wanted to buy a used popup camper but I won't if it is considered fraud.

[justbroke]

I haven't purchased anything at the moment. I wanted to buy a used popup camper but I won't if it is considered fraud.

It's not that it's considered "fraud", it's whether it's considered non-dischargeable.

How will you obtain funds to purchase this camper. That's the question. Also, if you can't find an exemption that will cover it (which is highly unlikely), the Trustee may take it and liquidate it anyhow.

Where are you getting the funds from?

[spearmint]

I am not sure yet

[lrprn]

I'm somewhat concerned for you in this situation because a pop-up camper is considered a luxury item by most trustees. This is completely different than buying a car right before filing a 13. Buying a non-necessary camper right before filing could definitely raise your trustee's suspicions. This is no different to a trustee than buying a mink coat using a secured loan right before filing.

Why are you thinking it's a good idea to get a loan to purchase a pop-up camper right now?

[spearmint]

I'm somewhat concerned for you in this situation because a pop-up camper is considered a luxury item by most trustees. This is completely different than buying a car right before filing a 13. Buying a non-necessary camper right before filing could definitely raise your trustee's suspicions. This is no different to a trustee than buying a mink coat using a secured loan right before filing.

Why are you thinking it's a good idea to get a loan to purchase a pop-up camper right now?

I was going to buy one last year but didn't. I know I won't be able to incur new debt for five years while in Ch13 so I thought I should get it beforehand. However, if it looks strange, I won't.

There's no way I will be able to save a dime for 5 years. I am maxed out now even before filing Ch13 but I have to do it to pay off a debt that can't be discharged.

[relief13035]

A pop-up camper is not a necessity to live. I'd forget this idea for now.

[justbroke]

I am not sure yet

Then you shouldn't even be thinking about it. I thought this was something you needed, and had already planned to get. You will probably have issues with it if you were to purchase it, as I don't see the need for it.