? about new vehicle!! Is this fraud?

[Mommy22]

Ok just a quick ?. Today I went and spoke to an attorney about filing. One of my main reasons for having to file is a huge truck payment. I currently owe around 26000 and it is worth around 18000. So I am majorly upside down. The attorney suggested letting the truck go but that I go out and purchase a new smaller vehicle w/ an approx 300 a mnth or less payment and then reaffirm the new car. My ? is this.....isnt that fraud? Would this not raise flags? Im confused because everything I read said no new purchases with in 3 months . On the other side I will need a vehicle, any suggestions?

[follie]

The reason it's not fraud is that you would still keep paying on the smaller, cheaper vehicle. The warning of fraud is to not charge up or buy anything that you would then turn around and discharge tomorrow.

[phoenix44212]

I was wondering the same thing. If you don't get rid of the first car, is this still considered abuse??

[PaKettle]

Does anyone know this for a fact (that this would not be considered abuse)?
I am in a similar situation. I knew I MIGHT have to file bankruptcy a few months ago, but my old car was going bad and I felt it best to buy a dependable new car. (I live in a place that without a car life would be pure hell and if I don't get to work on time, I would lose my job.) So I bought the car, planning to just "reaffirm it" if I did indeed have to file.

Now, a few months later, I am indeed going to file (in a couple more months), and am wondering if 1) will I for sure be able to reaffirm the loan and keep the car? and 2) will it be considered abuse?

I am having an appointment with an attorney this week, I think, so maybe I can post his answer here. Meanwhile, opinions? Anyone gone through a similar situation?

[lrprn]

Does anyone know this for a fact (that this would not be considered abuse)??

Pa, we aren't bankruptcy lawyers - just knowledgeable filers who try to educate ourselves as thoroughly as possible about every aspect of bankruptcy.

Having made that disclaimer, as far as I know, the situation you are describing is not abuse because the car is a secured asset and is being declared in your bankruptcy. As long as the purchased car is a reasonable one you can protect with your exemptions, you reaffirm the loan with the lender, and keep making the payments on time after filing, what is being abused? The creditor is getting their money and you haven't hidden the asset either.

Abuse (a more accurate word to use here is fraud) typically happens when debts are deliberately omitted or hidden from the court, or assets are traded to insiders again with the intent to hide them from the court. Nothing is being hidden or traded in your situation.

Only exception is if you buy a Corvette or other very expensive car so close to filing, that will very likely be challenged by the local trustee or US Trustee. It's hard to accept that you can buy a Jaguar one month and need to file Ch 7 the next, even if you do reaffirm the loan

Of course, the only truly reliable legal advice is going to come from an experienced bk lawyer in your area.

[CATCHMEIFYOUCAN]

I had a Honda Accord, fully paid for, so I had no car payment when I was going to file. After I gave my retainer payment to my lawyer. My car got flooded! My lawyer told me to go out and by myself another car before I actually filed and to make sure I had at least a month or 2 payments worth to show when I do decide to actually file. I ended up buying a Hyundai Sonata. I filed a month later, and showed the Trustee I had made 2 payments already on my new car. He questioned what had happened to my Honda and I showed him the insurance papers the vehicle had gotten flooded and I had to buy another car to get to work. He left it alone.

Just my 2 cents, CMIYC