New car purchase questions???

[Mere]

Hello all, I am new so I have a lot of questions...We have met with an attorney and it has been advised that we file a ch. 13. When we sat down with her she asked us about our cars both 2004's. She suggested we try and buy a new car before we file becuase chances of us getting an auto loan after filing will be slim to none.

So, yesterday we traded a 2004 Infinity G35 coupe, for a 2011 Hyundai Sonata.

Do you think this will be viewed by the trustee in a positive way? As we only owed a small amount on the older car, and now have a car payment for 5 years.

Our decision was based on being practical we wanted to make sure we would have a safe reliable car, under waranty for the next 5 years, and the purchase price with intrest is very high, but the payments for the next 5 years are within line of what we were paying for the Infinity.

I hope this was a good decision...

I appreciate your feed back

[keepinitreal]

I think it was very smart to replace a 6 or 7 year old car with a new car just prior to entering a Chapter 13. There have been several posts here from people in a 13 whose cars have died and they are frantically trying to get a replacement.

[cspa522]

We were advised the same thing. We are preparing to file on 11/24 and my 2002 Jeep Liberty with 128,000 miles on it wasn't going to make it 5 more years. We traded it in and got a 2009 Mazda5, at the advice of our attorney. Better now than trying to get a loan while in Ch 13!! I think it was a smart move.

[mummsie223]

I think you made a smart move.

Unfortunately, I found this forum just after we filed a 13 in January. We had no idea that we wouldn't be able to find a lender...dumb on our part. Lawyer never suggested that we replace our 2001 car that had well over 100,000 miles on it. Now, we have a dead 2001 car with 184,000 miles in the driveway and not able to find a lender.

Wish we had been smarter.

[Mere]

Don't feel bad Mummsie, I question myself every day, and I am sure I will make mistakes during this process. Sometime we just don't know what to ask...I noticed you are in PA, we are looking for a good BK attorney. Any suggestions? We are in the Phila. area...I just want someone good to take care of us, someone experianced. Thanks

[momofthree]

the purchase price with intrest is very high, but the payments for the next 5 years are within line of what we were paying for the Infinity.

"high" is a relative term. As long as it's under the IRS standard of around $490-ish (too lazy to look up the exact figure right now, lol), then you'll be fine.

[Nicollette]

I think you made a smart move.

Unfortunately, I found this forum just after we filed a 13 in January. We had no idea that we wouldn't be able to find a lender...dumb on our part. Lawyer never suggested that we replace our 2001 car that had well over 100,000 miles on it. Now, we have a dead 2001 car with 184,000 miles in the driveway and not able to find a lender.

Wish we had been smarter.

There are lenders out there that will finance vehicles for people that are in an active Ch 13. Im presently in a 13 and was able to finance a vehicle, but first you have to seek permission from your trustee to incur the debt. If you have any questions, just send me a PM.

[Mere]

Ok, now I am a little concerned...Momofthree wrote that there is a cap around 490 ish, is that the max payment allowed? Because with the crazy intrest rate they gave me my payment is around $600 per month, I know that sounds horrible, but I was afraid as my credit get worse and worse I would not be able to get a loan at all.

We have not filed yet.

I read on here that if a trustee feels as thought the intrest is too high, they will have it reduced and place the differance towards your fund is this true?

All I know is I don't want them to take the car from us...how is this going to go? If there is a cap, what do they do?

[Flying2BK]

Just bought a newer car and have $440.00 a month car payments.

My question is my OLDER car....Should I stop paying on it and let it sit? I was thinking of selling it but I wonder if that helps since I am going to file CH13 anyway soon and surrender the older Vehicle?


I owe 14K on it....and it might sell around that or a little less? Who knows?

[KatieBelle]

Hi! We are new here and like some that have posted, in the same boat with trying to replace a leased car while a year and a half in a Chapt. 13. We were sent a form from the atty's office to fill out. The form requires that we put down the amount and percentage, but do not understand how we are supposed to do this if no one will even talk to us unless they have a "letter" from the trustee with a guarantee that the car will not be included in the bankruptcy at any point. Our atty says there is no such letter. We feel like we are in a catch-22. Has anyone else dealt with this? Thanks-Katie

[debtinohio]

Ok, now I am a little concerned...Momofthree wrote that there is a cap around 490 ish, is that the max payment allowed? Because with the crazy intrest rate they gave me my payment is around $600 per month, I know that sounds horrible, but I was afraid as my credit get worse and worse I would not be able to get a loan at all.

We have not filed yet.

I read on here that if a trustee feels as thought the intrest is too high, they will have it reduced and place the differance towards your fund is this true?

All I know is I don't want them to take the car from us...how is this going to go? If there is a cap, what do they do?

Well - the general IRS limits are like 480.

Is this your only car payment? I would not go in having 2 brand new 20K + cars at $600/month. Make sure the next one is $400 or so to bring the average of the 2 payments down.

Your argument of safe/reliable/warranty is fine but that could have been accomplished with an Elantra for $15000.

With that said, I made it through with car payments of $600 and $650 but I did get some verbal assault by my trustee at the hearing.

Good luck!

[Mere]

To debt in ohio, no it's not our only car payment the other is $550 for about 2 more years. Prior to buying this car the Infinity payment was $525. We are prob. going to take some abuse, but what's done is done. We are going to be on a 100% repay plan I assume, so hopefully these payments won't be a problem.

The new car payment would be way less but the intest is through the roof, I saw on here something about the trustee being able to reduce your intrest rate so they can include the additional money in the fund, do you know anything about that or have I been misinformed?

Also what is a cram down? or a 910, I think that will apply to our second vehicle. Any thoughts?

Thanks ;)

[Nicollette]

The new car payment would be way less but the intest is through the roof, I saw on here something about the trustee being able to reduce your intrest rate so they can include the additional money in the fund, do you know anything about that or have I been misinformed?

Also what is a cram down? or a 910, I think that will apply to our second vehicle. Any thoughts?

Thanks ;)

When I surrendered the vehicle that I had included in my plan, which was being paid for thru my plan, my attorney had my plan modified, so the payments to the trustee were reduced, because that additional money wasn't needed for that car(secured creditor). I had financed a car while in my plan, that is being paid for outside of the plan, and thats why I surrendered the previous vehicle.

As far as the 910 rule, or cram down, it has something to do with, if you've had your car at least 910 days prior to filing BK, then you can cram down the value of the car.