Can I purchase a car during BK?

[jjsmith]

We've completed our 341 & received our report of no distribution. We're in desperate need of a new car as we only have one and it doesn't have enough seat belts for our family. Financing isn't an issue as we have a family member who will lend us the money for the car.

Is this something that we have to tell the trustee about? I don't want to give the trustee any reason to open our file again!!!

Perhaps we should have our family member put it in their name until after we discharge?

[JRScott]

You have to have the Trustees permission to take on any new debt, public or private.

If they bought a car for themselves and then loaned it to you...then technically you wouldn't need the trustees permission.

[mtbc]

When don't you need their permission any more? After all, now they're satisfied with our 341, our trustee's filed to be relieved of their duties. Does one have to wait until discharge, or actual closure of the case, or what?

[JRScott]

Close of the case.

[mtbc]

Cool, thank you, good to know. That makes sense.

[mtbc]

Does that mean you need to be careful about other things while the case is still open? For instance, year-to-year apartment leases are something you list, and something that bankruptcy can free you from, so would you need the trustee's permission to sign a year apartment lease if the case is still open? Perhaps the rule counts for pretty much anything that looks like a contract that brings future financial commitment?

[mtbc]

This being in the chapter 7 section, I should mention http://www.bkforum.com/showthread.php?p=378600 that suggests it's after discharge, you don't have to wait for the case to close.

[CCsAreEvil]

I don't know why JRScott says close of the case.. I applied and was approved for a CC after discharge.

I think the best is to wait after discharge.

[BobMango]

I think once you have the report of no distribution in Chapter 7 you should be fine. As far as my attorney was concerned, that was the key date since the trustee is basically done with you, barring any objections or adversary proceedings. The only area of concern he mentioned was disposing of property before discharge. In that case he would have had us ask the trustee for permission. At any rate I know folks that applied for and received a credit card before discharge.

I think some folks are getting the restrictions and notification requirements associated with Chapter 13 confused with Chapter 7, however if anyone can provide case law or where in the bankruptcy code it indicates that you cannot take on new debt at any time during a Chapter 7 I'd love to see it.

[mtbc]

That's a thought. I've seen plenty of people mention these restrictions in the context of chapter 7, but not yet read anything "official" or in the Nolo book confirming it. Now you really have me wondering what the truth is!