can I purchase a new car weeks before filing chapter 7

[Help!]

You're right, Laurannm, our situation wasn't really the same so that's probably not the best analogy. My point is that a brand new car is an eyebrow-raiser at a 341 hearing. Why not a one or two year old Camry? The more humble and less materialistic the debtor appears, the better. I think you'll understand where I'm coming from if you hang out in the courtroom a while before or after your 341. Each case has a certain feel to it, and a brand new car changes the atmosphere.

[jpntx]

The reason for mentioning a new car is this, I was approved thru capitol one blank check. The older the car the higher the interest rate.

The car that I will surrender is a '02 ford expedition, that cost me about 1200 dlrs a month in pmt, gas and insurance. it's worth close to 6k, I owe more that 16k on it.

[laurannm]

That is true, you certainly don't want to show up with all sorts new items on your paperwork that your looking to exempt.

Back in March we bought a 2008 Nissan Versa, for $14k with no money down. At the time my Sentra with 180k miles on it had finally died. Our payment is well below IRS standards, and we'e made the 5 payments since then. I am hoping now that the trustee won't raise a stink, what do you think? Like I said earlier none of the attorney's, including the one we eventually retained, thought this would be an issue.

Given what you went through I very much value your opinion!

[Help!]

The reason for mentioning a new car is this, I was approved thru capitol one blank check. The older the car the higher the interest rate.

The car that I will surrender is a '02 ford expedition, that cost me about 1200 dlrs a month in pmt, gas and insurance. it's worth close to 6k, I owe more that 16k on it.

I understand your point. It absolutely makes sense to me and with a new car you know you've got a warranty and no more unexpected car repairs. It all sounds logical, and from your point of view (before filing) I'd probably do exactly what you're contemplating. From my point of view (after watching three hours of 341 hearings and rebutting the presumption of abuse by the skin of my teeth) this is something I absolutely would not do.

[laurannm]

So now I am a little spooked...Back in March we bought a 2008 Nissan Versa, for $14k with no money down. At the time my Sentra with 180k miles on it had finally died. Our payment is well below IRS standards, and we'e made the 5 payments since then. I am hoping now that the trustee won't raise a stink, what do you think? We hadn't retained any lawyers at the time

[Help!]

That is true, you certainly don't want to show up with all sorts new items on your paperwork that your looking to exempt.

Back in March we bought a 2008 Nissan Versa, for $14k with no money down. At the time my Sentra with 180k miles on it had finally died. Our payment is well below IRS standards, and we'e made the 5 payments since then. I am hoping now that the trustee won't raise a stink, what do you think? Like I said earlier none of the attorney's, including the one we eventually retained, thought this would be an issue.

Given what you went through I very much value your opinion

I completely understand the reasoning in the decision you made. The vehicle exemptions are totally unreasonable (what the heck kind of car can anyone get for under $5K??!). You also chose the least expensive car you possibly could (not an Altima or even a Sentra). Exactly what I would have done.

The problem is that the trustee (or UST) may not see the logic in that decision. They may wonder why you couldn't have gotten by with a three year old Sentra instead. It sounds crazy, but from what I've seen you'd almost be better off with a more expensive car that's two years old than an inexpensive one that's brand new. It's the "brand new" part that makes it seem like a luxury. Everything looks a little different with the above median, high unsecured debt lens.

The attorneys in your area would know the trends in your district best, and maybe there's a different environment where you are filing. But, you know my opinion about BK attorneys.

I'd be prepared for a stink, but obviously I am biased because of my own case and I would always err on the side of caution. That's the great thing about this forum - always room for debate and people with different opinions and perspectives. Everything I say is coming from the "worst case scenario" perspective, so at least you know that no matter what your case will not be that bad.

[laurannm]

I completely understand the reasoning in the decision you made. The vehicle exemptions are totally unreasonable (what the heck kind of car can anyone get for under $5K??!). You also chose the least expensive car you possibly could (not an Altima or even a Sentra). Exactly what I would have done.

The problem is that the trustee (or UST) may not see the logic in that decision. They may wonder why you couldn't have gotten by with a three year old Sentra instead. It sounds crazy, but from what I've seen you'd almost be better off with a more expensive car that's two years old than an inexpensive one that's brand new. It's the "brand new" part that makes it seem like a luxury. Everything looks a little different with the above median, high unsecured debt lens.

The attorneys in your area would know the trends in your district best, and maybe there's a different environment where you are filing. But, you know my opinion about BK attorneys.

I'd be prepared for a stink, but obviously I am biased because of my own case and I would always err on the side of caution. That's the great thing about this forum - always room for debate and people with different opinions and perspectives. Everything I say is coming from the "worst case scenario" perspective, so at least you know that no matter what your case will not be that bad.

Thanks again for your insight. I am hoping that your right and that our attorney knows the trends in our district. I would be a little more worried if multiple attorney's mentioned that as an issue, but none did so i am keeping my fingers crossed.

Worst case can they actually try to dismiss in our scenario?

[Help!]

What they "can" do is almost limitless. No, I don't think they would try to dismiss just on that one point... the UST usually includes a handful of things in a motion to dismiss (if you can, read a couple from PACER in your district). If they did, you could always offer to surrender it. It would be hard to accuse someone of abuse if they're willing to hand over the object in dispute.

[deafbroke]

In my opinion, regardless of attorney saying it is ok, I would not buy a new car until AFTER your bankruptcy is closed. You can keep the expedition without reaffirming it, and when the bankruptcy is over stop paying on it, let it go back to dealer, by not reaffirming it you are not liable for money owed, just be sure t list the expedition in your bankruptcy, and buy new car. Buy one before bankruptcy might draw wrong attention at 341 (US Trustee?).

DB

[TEW]

[Help!]

The trustee is not just concerned with non-exempt equity to liquidate... their job is to maximize repayment to creditors. In the trustee's eyes, if there is a $450 car payment for a 2008 Camry instead of a $200 car payment for a 2000 Camry, that extra $250/mo. could have helped fund a Ch. 13 payment plan. If a car payment exists where it didn't three months ago, that will also be questioned. It is (at least in my opinion) far better not to have to defend decisions like these when you are already fighting the above-median battle.

[lrprn]

Folks, keep in mind that how local trustees treat getting a new (or new-to-you) car close to filing differently, even sometimes even trustees in the same local court! There is no certain answer to the original poster's question about when it's safe to buy a new car before or during bankruptcy.

As many members have already said, if you can wait until after discharge, that's the only 100% safe bet. Before filing and between filing and discharge - only an experienced bk lawyer can tell you whether buying a new or used car is going to be ok for YOU or not.

[Frogge]

I just wanted to say that Help! ----I've followed your posts & you provide a lot of good information and insight based on what you've been through with your filing. I appreciate your opinions.

[Help!]

Thank you Frogge. Lrprn is absolutely right about the vast differences between districts. A good lawyer would be the best source of information. My vantage point is pretty conservatively biased.

[yeahdischarged]

Maybe blunt here, but why would someone go through the trouble with a bankruptcy and go buy a brand new car to have the loan upside down in 5 minutes? Crazy. Please stop and think here and make you sure you really get your "fresh start".

If I were you, I would get a vehicle, but definitely a used vehicle.