Submitting Notice to Incur more Debt

[tleeburks]

We've been our 13 since November and payments are going fine. However we have 2 vehicles in the plan. A 1994 silverado and 1997 ford windstar. The silverado has 150,000 + miles on it and is starter to overheat at times not to mention the gas hog capabilities. We want to submit a notice to incur more debt and go out and purchase a newer vehicle. Not brand new just a 4 door car with low mileage with payments probably around 350.00 a month. Then we want to send back the van or the truck. They haven't started paying on the truck yet anyway (trustee) because they wanted the arreage on the house caught up first. What is the possibilities that they will approve this and give us the letter to do it? Also is there any advice on how to explain to the lawyer why we want another vehicle? We wanted to do this when we filed and should of just bought another vehicle before we filed but woulda, shoulda, coulda. Thanks for the advice.

Terry

[quickteg]

Easy to get the application, BUT

I was in the same boat as you. I called the trustee and all you have to do is ask them to send you the form. The form states that once you find a loan/financing for a vehicle, you submit the info back to the trustee and they will make a determination. Once they approve, you get to go buy your new car and drive off happily into the sunset.

Now here's what happens in reality:

You most likely won't find ANYONE that will finance you while you are ACTIVELY in your ch. 13, regardless of the interest rate. I called/applied to more than 10 different places, all said that the bankruptcy would need to be discharged/dismissed. I called the trustee back, but they were useless as usual.

So I got a better job and paid cash for my new car. I sold the old car that I claimed in bankruptcy once they sent me the pink slip.

I'm not saying its impossible to get financing, but be prepared to make a few calls!

Please post if you find someone to finance you!

[13inOR]

I agree with quickteg. The financing will be the tough part, though I think it could be done. The trick is convincing the dealer to hold the car you have chosen till you secure approval from the trustee. You can give it a try, I know it has been done by people before, though its not easy. I don't know if they service the entire US, but there is a place called Reliable that I think might do that. You could check it out, just a thought.

[quickteg]

Oh yeah....

The other things to keep in mind are:

1. most lenders will offer you a sub-prime rate. The trustee WILL NOT approve any loan at a rate that sucks (It's stated on the request to incur debt)

2. It's very easy to get caught in a little game wherein the dealer refuses to quote a loan without trustee approval, yet the trustee refuses to accept your request to incur debt without knowing what the dealer's terms are.

Keep in mind, these people work for (or are contracted by) the government. Most are not qualified to make you an extra value meal at McDonald's, so a lot of these policies aren't thought out quite right.

[13inOR]

One time we were thinking of doing this (decided not to before we really pursued it) and it seems like the rate couldnt be over 24% with a payment of not over $250, with total cost of vehicle not being over 10K. Also, couldnt be a truck, suv, or sports car. Thats what I recall our trustees requirements being anyway.