Timing of buying another car wih Chapter 7

[BKinGA]

My daughter will be filing Chapter 7 this month and does not want to keep her auto that is upside down by 10k. (A $650/mo payment).

At what point can she get another car, (1) immediately after filing, (2) after the 341 meeting or (3) after discharge?

She has to have a car for transportation and cannot put off the bankruptcy for several months.

Her home (that she has already vacated) with a first and second mortgage will be sold on the courthouse steps on March 3rd and she does not want to pay on the second mortgage (they are already threatening to sue if she does not sign a reafirmation agreement on the second).

I have read many of the auto related posts and if she had the luxury of more time, she could get the new car (with less expensive payments) a few months before filing, but she doesnt have that option.

Comments please and thanks.

[MichaelInUT]

I can only speak for my state of Utah, but we're allowed $2,500 per person (or $5k total per couple) of car value in a Ch7. If it is similar there, one option is she she could pick up a used vehicle for the time being and they can't take it away. That's what we're doing; surrendering our upside-down car, and keeping a used exempt one.

[AngelinaCat]

Here in Florida, we are allowed $1000.00 value of a car. I picked up a nice used car at an auction for $800.00. 'Hub put about $200.00 worth of tune-up, oil change and alternator on it and it runs fine. I have had it three years.

[BKinGA]

Thats good to know, but if she does want to finance another one....

At what point can she do it, (1) immediately after filing, (2) after the 341 meeting or (3) after discharge?

Could someone address that? Thanks again.

[StartingOver08]

After discharge. Most of the lenders will not touch you until you are discharged. Except maybe a buy here, pay here type place.

[BKinGA]

I know that since I have filed Chapter 7, I have already gotten offers including major chevrolet dealers and they say before discharge.

But I am wondering how it would look in the eyes of a trustee because I dont want to steer my daughter in the wrong direction.

Any other comments?

[fathergolf]

We financed a car about 45 days after our 341. We used Prestige Financial who works with certain dealerships. You can contact them to find out what dealership in your area they work with. Interest rate was 17.95 (high but the 722 ones are 24) and down payment isn't bad. Figure we car refinance after a year and get a better rate.

[SubPrimeME]

Here in MN, you cannot get financing until you have been discharged. You can however purchase a new vehicle before you file!

***Note- nothing is impossible, so when I say you cannot, I'm sure there is SOMEONE that will doit, just not anything I have found***

[BKinGA]

Just a follow-up on this post.

I contacted Fresh Start, one of the redemption programs and they said that because my daughters vehicle didnt get an average of 17 mpg or more that it wasnt eligible for a redemption.

So she will definitely need to get another car and let the other one go back to the dealer.

Right now her credit score is till relatively good.

If she got another car financed just BEFORE filing chapter 7, what would be the consequences of that action? Especially if the new car was more fuel efficient and less expensive/with a lower car payment.

Would the trustee allow that?

Thanks again for your help.

[lightmank]

I would just have her buy a cheap $2000 or less car, as long as it will be exempt under your state law.

I'm in the process of filing a ch7 bk and I am getting rid of my car that I owe $14,000 on and it's only worth like $6,000. I went out and bought myself a $1,500 beater car that I plan to drive for a year or so. Then use the money I save to either pay cash for a better car, or use the money as a down payment on a better car.

[outsidetool]

My daughter will be filing Chapter 7 this month and does not want to keep her auto that is upside down by 10k. (A $650/mo payment).

At what point can she get another car, (1) immediately after filing, (2) after the 341 meeting or (3) after discharge?

She has to have a car for transportation and cannot put off the bankruptcy for several months.

Her home (that she has already vacated) with a first and second mortgage will be sold on the courthouse steps on March 3rd and she does not want to pay on the second mortgage (they are already threatening to sue if she does not sign a reafirmation agreement on the second).

I have read many of the auto related posts and if she had the luxury of more time, she could get the new car (with less expensive payments) a few months before filing, but she doesnt have that option.

Comments please and thanks.

I got another car about 40 days after filing (11 days after my 341). I'm in Utah; had several offers in the mail. I gave up a truck that was a huge payment; my new payment is $400/m less. I had originally gone to a Chevy dealership which had sent me an offer in the mail and was going to get a nicer $20k car. The payment was going to be only $150/m less. So I went with a $10k car. Decent wheels.