Vehicle trade in

[steveok]

I have a vehicle that is included in an active Chapter 13 which will be paid in full in approximately 3 months inside the plan. At this point, the vehicle is free and clear and worth around $15,000. Due to the gas mileage and the distance I travel to and from work, I am considering trading it in at a used dealer for another vehicle that gets better gas mileage for an amount very close to what I am offered thus not having to get a loan approval from the court. Would I have to get approval from the Trustee to make this transaction?

[shellbell]

I would have to say yes. All credit decisions need the Trustees permission. Consult your attorney.

[lrprn]

You must have your trustee's permission to sell the current car (it's a secured asset in your plan) and incur new debt. If you can get a reliable car for less than $15K, you won't incur new debt. However, you still need your trustee's permission to sell the current car.

Also there's one more thing to keep in mind - some car lenders will not give you the car's title, even if the car is paid off, before your plan is successfully completed and you are discharged. You can't sell the car without the title. Your lawyer can give you an idea whether your car lender is one that won't cough up the title until discharge..

[steveok]

I should be ok on the title...I work for the financial institution that has the lien...Thanks for the advise!

[catleg]

Check your chapter 13 plan document.
On the last page mine has "OTHER PLAN PROVISIONS"
Vesting of property of the estate
Property of the estate shall revest in the debtor
(x) upon confirmation
( ) upon discharge

If yours is like mine, then I don't think you even need trustee permission to sell or exchange your asset.
YMMV, I am not a lawyer, for entertainment purposes only.