Chapter 13 and Car

[meetsv]

Good Morning,

We are filling chapter 13 in a few months, one of our car will be payoff a month after we file, our question is what happen to that amount? Do the trustee keep it and distribute to the credit card? Should we get another car, this one is giving us problems and I dont't believe it will make it thru the 5 years.

Thank you,

[justbroke]

This is certainly something your attorney can answer, but I'll let you know what many Chapter 13 debtors do. They make sure that they have "newer" and/or reliable cars to make it the 5 years into the plan. Additionally, another car gives you more "expense" money in the plan and it could be a strategic decision to have more than one car payment in the plan! The reason I refer to an attorney is solely because this expense may depend on whether you are filing jointly and to whom the cars are titled.

In any case, don't go through 5 years of a Chapter 13 with an unreliable cars. While you could incur more debt and purchase a new car in a Chapter 13, it's a drawn out process (not as quick as you would believe).