I'm thinking about financing a car at just under $15,000. It would be a five year loan with payments between $250-$300 per month. The only way I will be able to make the car payments is to stop paying either my credit cards or 2nd mortgage that will be stripped. But, I would stop paying soon any way as I my ability to continue making all payments will cease in April or May because of the end of an introductory CC rate. Even with the car loan, my unsecured creditors will get something in my plan, but they will get less than half of what they will get if I don't buy the car. I know buying a car is a common bankruptcy planning technique. But, could the trustee or unsecured creditors object to the purchase and finance of the car immediately before stopping payments to unsecureds and so soon before filing bankruptcy?
That's the question. Here's more background:
I will be filing a Chapter 13, probably in about 3 months, more if I don't get sued and can stand the calls from creditors. I am current on all my debt payments. My last credit card charges were in mid-January, but those were only a couple of small automatic payments that I didn't cancel (I made more significant charges in December). The only reason I haven't already stopped paying unsecured creditors is that I want to be able finance a car before late payments show up on my credit report. I'm married and filing separately. We have one vehicle in my name, a 1999 Toyota Tacoma truck. I am worried about relying on it for the next five years. I would also like something more fuel efficient, but don't want to give up the truck because we use it for camping, which will likely be our only way to take vacations over the next five years. We will also need it to sleep in on road trips to visit our elderly parents since we will no longer be able to charge a hotel room to the credit card when we can't stay awake the whole way. My assets are well within California exemptions even if I end up with some equity in the new car, which isn't likely.
I've consulted with one attorney who said it would be okay to finance a second car. But, she isn't very experienced and I had to correct her on one thing she told me. I'm not completely confident following her advice. I plan to consult with a more exprienced attorney, but if I am going to buy a car, I want to do it quickly before my next round of payments to unsecured creditors comes up. So, I thought I'd see what people here think.
That's the question. Here's more background:
I will be filing a Chapter 13, probably in about 3 months, more if I don't get sued and can stand the calls from creditors. I am current on all my debt payments. My last credit card charges were in mid-January, but those were only a couple of small automatic payments that I didn't cancel (I made more significant charges in December). The only reason I haven't already stopped paying unsecured creditors is that I want to be able finance a car before late payments show up on my credit report. I'm married and filing separately. We have one vehicle in my name, a 1999 Toyota Tacoma truck. I am worried about relying on it for the next five years. I would also like something more fuel efficient, but don't want to give up the truck because we use it for camping, which will likely be our only way to take vacations over the next five years. We will also need it to sleep in on road trips to visit our elderly parents since we will no longer be able to charge a hotel room to the credit card when we can't stay awake the whole way. My assets are well within California exemptions even if I end up with some equity in the new car, which isn't likely.
I've consulted with one attorney who said it would be okay to finance a second car. But, she isn't very experienced and I had to correct her on one thing she told me. I'm not completely confident following her advice. I plan to consult with a more exprienced attorney, but if I am going to buy a car, I want to do it quickly before my next round of payments to unsecured creditors comes up. So, I thought I'd see what people here think.
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