Obtaining a reliable car prior to Ch 13?

[Simplynohope]

My attorney advised me to obtain a reliable car that would last me 5 years while under Ch 13. My credit score is 535 and I was declined a loan for a new car with warranty (moderately priced). My question is, can my Dad finance the car and and insure it, and will the trustee allow me to just pay him monthly in my payment plan? How do I know how much the trustee will allow for a car payment? I have searched and searched and cannot find a thread that details how one might approach getting a car without bleeding out on interest. Help!

[LadyInTheRed]

Welcome to BKforum!

Ask your attorney how low you should keep your car payment. Generally, you need to keep it under the ownership allowance which is $517 in the West Census Region where New Mexico is located. But, there could be other factors in your situation that would require you to keep your payment lower.

Don't worry so much about the interest rate. The rate will probably be reduced to the "Till Rate" in your plan. Even if it doesn't, what doesn't go to pay the car loan will go to unsecured creditors. So, a higher interest rate would only make a difference to you if your plan will pay 100% of unsecured claims.

Your father can lend you the money. Just make sure that the loan is properly documented and that he perfects the lien on the car before you file your BK. Or did you mean can he take out the loan? If he does, the payments can't be included in your plan because it will not be your debt.

[HHM]

Here you go

http://www.**********.com/blog/2012/...13-bankruptcy/

[ValleYum]

Could the OP claim the auto expense if his dad simply co-signed the car loan? Would the OP's filing BK hurt his dad's credit scores if did co- sign?

[LadyInTheRed]

Yes, if Dad cosigned, OP could still claim the ownership expense. The OP's BK wouldn't affect Dad's credit score.

[Simplynohope]

Thank you for responding. I really want a solid reliable car (one less worry) but don't want to do ANYTHING to jeopardize my Dad's excellent credit. The information was very helpful.

Any further advice or responses would be welcomed. Knowledge is power right?

[Simplynohope]

My attorney at the initial consultation said that my higher salary may dictate a 100% pay back plan - that was before I found out that my soon-to-be ex had racked up another $40k of personal loans to an individual and multiple payday loans all without my knowledge. I went from $97K to +$150k in debt overnight with other debt possibly not yet discovered. My paid off car has just under 150k miles and the engine light just went off! I'm in a community property state and I'm the higher wage earner.

I'm hoping that the attorney can argue some kind of deal for me -- but I desperately need a vehicle to get to my job (stable long term with great benefits). Chapter 13 seems like the only way I will be able to get any kind of relief especially if I have to pay his shady payday loans.

I'm just so overwhelmed - hoping the car will ease my mind that I won't break down on the highway to and from work.

Thanks again.

[glassmoon]

Simplynohope...if you haven't purchased a car yet I highly recommend a Toyota Corolla. I have a 2006 model w/ automatic tranny purchased new 2 yrs prior to my filing. It has nearly 109,000 miles. Only service has been tires, brake pads, oil changes every 4k miles, and a tranny fluid change. Gets great gas mileage...over 33 city, if you don't have a lead foot LOL ...and if you invest in good tires, like Pirellis the car is fun to drive.

[angel7821]

Simplynohope...if you haven't purchased a car yet I highly recommend a Toyota Corolla. I have a 2006 model w/ automatic tranny purchased new 2 yrs prior to my filing. It has nearly 109,000 miles. Only service has been tires, brake pads, oil changes every 4k miles, and a tranny fluid change. Gets great gas mileage...over 33 city, if you don't have a lead foot LOL ...and if you invest in good tires, like Pirellis the car is fun to drive.

I agree with getting a Corolla also. I bought one new back in 2005 and have had ZERO issues with it. I of course have purchased new tires since then, only have done regular oil changes when needed, just regular maintenance when needed. And yes it is fun to drive. Mine has 150,000 miles on it and still going strong.

[andy158]

Yes. Do get a reliable preferably low milage vehicle before filing. Our primary car had 80k going in and my wife uses it constantly for travel for her job. It is approaching 200k and is nickle and diming us to death after putting a transmission in it a year ago! Bad thing it is being crammed down in our plan and I cant get rid it til our plan is completed.