Buying a vehicle before a 13

[tightgrip]

I have a quick question I thought I would ask on here before consulting with my attorney this afternoon. We recently surrendered my husbands work truck which was once a company paid truck until they took that away. Long story short. We had 1 main vehicle in 06 hubby got promoted truck went into company program where our payment was made, hubby bought me a used car for running the kids around and personal use, layoffs came hubby got bumped back down, we were stuck with 2 car payments and a pay cut. Now after surrendering we need to get him a vehicle for work. Our credit stinks right now due to late payments and such can it be possible to go to a buy here pay here dealer and get a vehicle around 7000 and still be ok? I know we are going to be filing within a month and I just dont see how we can save up enough money in that time to buy something reliable. Thanks!!

[SMinGA]

Tightgrip, whether or not you can put $7k into a car and the car be exempt will depend on your state exemptions. How much equity does your state allow per vehicle? Some states are more generous than others...

Another question - can you get something reliable for the amount of $ you can put down? If not, then you may want to ask your atty about financing a used vehicle. In most districts, vehicle loans are included in the plan and the APR is brought down to the district's 'till rate'. Here that is 5.5%. If your state has a low vehicle exemption, that may be the better plan. (Find a $10-12k vehicle, put down what you can without creating non-exempt equity.)

[BKchapter13]

Thats how chapter 13 is... as far as I know here in the state of michigan if you purchase anything three months before you file it is considered fraud. we have three crappy vehicles that all need work all the time, yeah, I could ask permission from the trustee for a car loan but what a hassle, that means higher insurance, a car payment, more money to the attny for a new pay plan mod and so on and so on. I would suggest speaking to a reliable bk attny about that and he or she should advise you how to go about it. Good luck with everything

[NoTomatoCan]

BKchapter13... I am in Michigan and ALL of the attorneys I spoke with HIGHLY recommended that I purchase a more reliable vehicle prior to filing. It is not considered fraud at all. The lender is getting paid back in full.

Maybe if I were to purchase a non-exempt luxury item or to charge up a bunch of items on our credit cards 90 days prior to filing it would be considered fraud or abuse, but purchasing a vehicle prior to BK is definitely not fraud. In fact, it is a very standard pre-bankruptcy planning strategy.

My wife and I purchased a new to us vehicle, made 2 of the monthly payments, and have since included it in our BK with no issues at all.

[sheilaE]

Our atty also said this was a good idea but I don't think anyone is going to finance it. We stopped paying our cc payments in January and it's showing on our credit report. I can see getting approved )with a high interest rate) if you've missed a few payment or were late with your payments, but when you've completely stopped making the payments as we have? I'm in the process of searching for a finance company that will give us a loan, but I'm not having much luck.

[SMinGA]

If Jan. is your first missed payment Sheila, no one can tell that you've 'totally stopped' paying. You would have hit 30 days late in February, so things would only be showing 30-60 days late now. Not great, but not the end of the world either.