Is my attorney correct?

[johnnyp26]

My paperwork is being filed for my bk today, starting my 60 day process. My car is days from being repossessed, as my attorney advised me to stop paying on it when we started this process almost 3 months ago.

I clearly need to get another car asap. I asked the attorney and he said I can go out and buy another car now, and the trustee won't care. He said that it will be tough to get a loan before the discharge, but some places will do it. Now my attorney used to be a trustee himself, so I assume he knows what he is talking about but...

Now I have a few questions. First, I'd rather buy a new car, I drive almost 90 miles a day round trip between taking my 2 young kids to school and work, so I need something extremely reliable. I've been down the "certified used" path before and it cost me an arm and a leg. Am I making a big mistake if I do get lucky and find a new car dealer/bank to finance me? My original intent was to not trade in my vehicle, but I have a good chunk of negative equity and the attorney recommended it. I just don't want to do anything to make the trustee mad, and I can't see how signing up for another $500 car payment would thrill him/her.

So have any of you purchased cars during your 60 day period? If so did it cause any problems? Did you go new or used? The only other option would be to buy a very high mileage car for cash which I would have to borrow from family, and I hate doing that. Any comments/suggestions are much appreciated.

P.S. Ride through is not available to me, already checked it out.

Thanks!

[mom2three09]

Your "60 days" doesn't start til after you've been to your 341 (meeting of creditors). Your 341 is usually scheduled about 30 days from the date of your BK filing (but can sometimes be further out).

As far as a vehicle goes, I think you should have bought a different car before you actually filed... not sure about taking on new debt once you're filed (pretty sure that's a no-no). Also, if the car that you're thinking of trading in has a lot of negative equity that will be rolled into your new loan making the payment high and also putting the new car into a neg. equity situation. Definitely not the smartest thing to do, IMO. I would let the negative equity vehicle go with the BK if I were you.

[RBisDebtFree]

Also, even if you get a decent loan and you fail to make payments after the discharge, they will repo the car, sell it for 50 on a dollar and keep you liable for the deficiency. At that point, they can pursue you all they want as you have no longer have the bankruptcy option. Just something to think about.

Even if you have to get a loan, why not get one for a very inexpensive car? You will save a whole lot on high interest payments that way and while you have that car you can be saving up for a better one to buy later. That's just my opinion though.

I wanted to buy a car about a month or so before filing and my attorney told me that I should not do this as the creditor I wanted to go through could come and simply cancel the whole bankruptcy process as fraud -- I guess it means that the lender could claim my new debt as fraudulent giving the trustee much more interest in looking closer into my case. You have already filed but I think the situation will be the same.

[berrymom35]

We needed a car during our 60 days and our atty strongly suggested we wait. During your 60 days, which does not start until after your 341 meeting, you need to get permission from the trustee to take on new debt, and loans are extremely hard to get. If you want to buy a car you need to do it before you file....and this may look bad to the tt who might assume you are taking on the purchase to pad your expenses.

[AngelinaCatHub]

It is possible to purchase a good used clunker from an individual for 1K or less. We bought a police car four cylinder car at auction for 800 bucks. Put a set of cheap Walmart tires on it, one alternator one battery plugs oil, filter. That was four years ago and it runs like a top. Cold air, and gets 28 mpg.

I purchased a single owner Chrysler NewYorker single owner 90K in perfect running condition for $1500. You loose about 25% depreciation the minute you sign the Title work on a new car. Buy an already tried and true GOOD used car. There is a glut of them out there as people are dumping what they cannot afford as cash is tight, insurance high so they go to single car families. You can dump the used one and save an emergency fund for another used one when that one gives out.

There is no reason a car made from 1990 to current should not get 200K life at least.

Only my opinion. 'Hub

[Chowder]

Another vote for good used.

[OhioFiler]

Why is a ride-through not an option? Have you looked at doing a 722 redemption?

[berrymom35]

Oh...we never buy new anymore. We've learned our lesson on that a couple of times before.....it never pays and a huge waste of money. Right now I'm driving a 2000 Windstar that has a bad transmission and needs some engine work...at 190,000 we are just about done with it as it needs more money in repairs than it is worth! The transmission started going out on the way home from our first 341 in October! I have to start of in second gear and then manually shift it into drive at the right speed...but it's still hanging in there! We plan on buying a good "used" vehicle once we are discharged...which should be any day now!

[johnnyp26]

Ok, so lets throw the new car out the window. Not having a car for the next 90 days or so is flat out not an option. If I take $3-4k and buy a used car, can the trustee come after me for that? The money would be borrowed from a family member. Either way after the process is over I am going to buy a newer car (might come from an auction), so I was trying to avoid the really cheap car route since I am just going to get rid of it in 6 months or so.

[RBisDebtFree]

Everything you earn after you file is your and all assets your obtain after filing is intact, unless you used assets you had before you filed to purchase something after you filed. That's as far as I know.

I think you should be ok, plus, there's a vehicle exemption, federal or state (it might not be available in your state) so an inexpensive vehicle would still be exempt.

[music12]

maybe instead of borrowing from a family member directly, have the family member buy it and keep in their name? then you would just be borrowing a car from a family member. and you can start paying them for it after the bk is over.

[johnnyp26]

maybe instead of borrowing from a family member directly, have the family member buy it and keep in their name? then you would just be borrowing a car from a family member. and you can start paying them for it after the bk is over.

They offered to just give us the money, so we don't have to go through the title changes and stuff after the fact. I don't want to give the appearance we are hiding anything from the trustee. My wife and I make good money, and are eliminating close to $3k a month in debt, so it's going to be paid back to the family member within 2 months.

[music12]

if you will have $3k a month to pay off debts, there is no way you will get a ch7. you'll be in a ch13.

[RBisDebtFree]

Maybe he is including mortgage payments on the house he is surrendering...

[johnnyp26]

if you will have $3k a month to pay off debts, there is no way you will get a ch7. you'll be in a ch13.

Yeah, that is including our mortgage debt. I'm in FL, so it will be a good year or so before I am out of the house, which will give us good time to save up.