Car loan during Ch13...please advice !

[kolCh13]

Hello..I'm in my 25th month of ch13. I have two cars on the plan and one of the cars need head gasket replacement as well as tires and brakes which will cost me around 4k-5k but the car is not even worth more then 5k in current market value.

Here is a little detail:
On my ch13 approval, my trustee didn't request for any on going tax return or any salary increase to show. Since last year my salary almost doubled and saving those extra money every month for rainy days. Now I would like to replace my old car but don't want to go thru the trustee's approval to get a loan. I'm trying to get new car because most of the newer ones come with 4 year free maintenance.

I can not ask any of my family members or friends to help me out because none of my family members or friends know that I filled Ch13.

Does anyone know of any dealer/loan company that approves car loan based on prof of income only and not report to credit bureau?

Thanks in advance for your help.

[goon]

Getting a car loan without trustee/judge approval would be illegal and could easily get your case dismissed, which I would be willing to wager would put you in a much worse position.

With some more information we may be able to help you come up with a better, legal, approach.

First I would get another quote on repairing the current car, the amount you list seems high for the work you describe.
Do you still owe money on the car?
Is it being paid in the plan?

do you know what % payback you would be with your current plan payments?

The likelihood of the trustee approving a loan for a "new" car is very low, and the likely hood of you getting a loan on a new car at the moment is probably lower.

But depending on some information if you found something "new to you" and reasonable, and got it approved, your plan payment may go up but at the same token the "new to you" vehicle could possibly get paid off by the end of your plan. (Someone with more experience please correct me if wrong, but if the car is being paid in the plan and the trustee approves to trade the car in for another vehicle wouldn't that new vehicle end up in the plan? or am I completely off base here.)

in any event your realistic options are to either repair the current car, find a reasonable car and get trustee approval, or save up enough cash to buy something outright. Keep in mind, no matter what you do there is still the chance that the trustee will find out about your pay increase and decide a plan modification is in order.

[forgotten]

As mentioned. Getting a loan without permission is illegal, so I don't suggest it. As well, the only place you have a remote chance of getting approved on income only without reporting would be a buy-here-pay-here lot (overpriced, and not a new car).

IMO, Either save up and pay in cash or keep your current car.

[LadyInTheRed]

Getting approval to incur debt to buy a car will likely require an examination of your current income and expenses and an increase in your plan payment if your income has doubled. Your best bet is to either fix the car or buy something you can pay cash for. That rainy day you've been saving for is here.

[HHM]

No one can really say what would happen, it depends on your circumstances.

As others have pointed out, you would need to seek trustee (strictly speaking it is court approval, but if the trustee signs off, then so does the court) permission to incur new debt.

Actually, since you have been in your plan 2 years, a car loan won't be that difficult to get, but you won't get the "best" rates, but the rates won't be horrible either...the dealership will really really want to sell you the car. As for lending without credit report, I don't really know of any dealership or lender that does car loans on only proof of income...if there are, they would be the seedier lots in the bad part of town selling the Sandy flood cars As I said, it really won't be too much of a hurdle to get a conventional car loan even while in active 13, happens all the time. The finance manager or lender will know to ask you for trustee permission anyway.

As others have alluded, the request may trigger a review. Now, if you are making a car payment on your current car, and your new payment would be about the same, trustee will not likely care to review since the loan won't upset the plan and no plan modification will be required. But if the car payment will increase or go from no car payment to having a car payment, a plan modification will likely be needed and that essentially requires updated financials (income and expenses).

[Sammie]

In our district the Trustee allows up to $7,000 for a car loan. Anything over that is investigated. sammie

[paulsk]

I you pay with Cash, you do not need an approval. FYI

[ccmisery]

I you pay with Cash, you do not need an approval. FYI

Who filing chapter 13 has that much cash laying around? Living paycheck to paycheck with no savings is typical for most, otherwise we wouldn't be in this situation.

I suppose if you stopped paying your credit card bills and within 9 months saved enough of what you would have given them, it's possible.

[paulsk]

"Since last year my salary almost doubled and saving those extra money every month for rainy days."

This caught my eye. I know most people have problems saving cash. But, some people can pay 100% in a Chapter 13, and then if their pay doubles, they are no longer in the hook to make more payment with a 100% plan. They can save that extra cash.

[momofthree]

I agree with the others, don't attempt to take out a loan without tt approval. You've stated that your income doubled and you've been saving that money. Pay cash for a newer vehicle.