Buying a Car During Bankruptcy????

[Beach Bum]

Who has accomplished this and how difficult was it?

We've been advised that since we aren't going to reaffirm one of our vehicles it may change our means test, (1 less car payment~$300 and 1 less vehicle operation expense~$300). That's $600 additional disposable income that may cause us to fail the means test.

If we purchased a new vehicle we could prove that we still have those expenses.

Advice?

Road Loans?
Ford Credit?
CapOne?

[BKTango]

You really are not supposed to take on any new debt while in an open bankruptcy. I would check with Roadloans first though, but I am not even sure they will do any lending without a discharge notice and most won't.

Curious...if you need to keep a payment in order to not have the disposable income, why not just keep the car you have?

[Beach Bum]

Our case is nuts. We pass the means test by a few hundred dollars but our Schedule J (Proposed Budget) balance is negative $1800. In order for our Attny to approve reaffirmations on our 2 vehicles we need have a $0 balance or more on Sch. J.
It's an accounting nightmare.

[HHM]

You cannot finance a car while you are in BK, you need your discharge first.

[SinkingFast]

Ride out the BK with the cars you currently have. Then arrange to Surrender them after you're Discharged and purchase replacement vehicles then.

Here's a thread for you:

http://bkforum.com/showthread.php?t=13879

That's pretty much what Walnut did.

Your other alternative is a 722 Redemption Loan. But your attny would have to arrange it. And the Trustee would have to approved it.

[nosrus77]

Actually, I'm a little more concerned with the other part of your question. My wife and I are filing chapter 7. Our auto payment is $538 per month (secured by two cars), and we're completely upside down (like, $10,000). We're under the median income on the mean's test, and the expenese work out to something like $40 in the hole (I and J forms). Are you saying that if we don't reaffirm, because our I and J gets ramped up, that we could be forced into a chapter 13 that we really can't afford?

The income side was figured on the last 6 mos income of course. I just started a new job on June 1 that pays me about $600 less per month. It's at a college, so that later on my 4 kids can get free tuition to a private 4 year university. I kinda figure that's a small price to pay until I can move up with promotions. i just don't want this to bite me in the butt . . .

[Beach Bum]

Actually, I'm a little more concerned with the other part of your question. My wife and I are filing chapter 7. Our auto payment is $538 per month (secured by two cars), and we're completely upside down (like, $10,000). We're under the median income on the mean's test, and the expenese work out to something like $40 in the hole (I and J forms). Are you saying that if we don't reaffirm, because our I and J gets ramped up, that we could be forced into a chapter 13 that we really can't afford?

The income side was figured on the last 6 mos income of course. I just started a new job on June 1 that pays me about $600 less per month. It's at a college, so that later on my 4 kids can get free tuition to a private 4 year university. I kinda figure that's a small price to pay until I can move up with promotions. i just don't want this to bite me in the butt . . .

I still really confuesed about how this works too, our attny still hasen't explained it to us very well. She says the law is still so new that it's hard to say what our trustee will do. Worst case is they can delay our DC and ask for an explainaiton.

I thought the means test was a snapshot of our income & expenses the day we filed and anything after that date wouldn't make a difference.

It's all so confusing.

[HHM]

If the issue is your car payment...your Forms I & J do not get changed because you are allowed transportation costs and car ownership costs.

[Beach Bum]

If the issue is your car payment...your Forms I & J do not get changed because you are allowed transportation costs and car ownership costs.

So if I let 1 of our 2 vehicles go in BK we will still be able to claim payments and expenses for 2 cars on our means test?

[brainless twit]

I don't know why you're being told that you can't buy a car until discharge - you can, though it's not a walk in the park.

My husband and I owned one car that we surrendered in our bankruptcy. It was falling apart and we owed more than it was worth. On the advice of our attorney, we decided not to reaffirm. Even though we surrendered it, the car payment and insurance were still listed on our Schedule J because that was our debt picture as of the day we filed.

About two weeks after we filed, the attorney's office called and said that the credit union wanted the car back. We could have held them off until after discharge, but the problems with the car were getting worse. I asked the attorney if we would be allowed to buy a new car, and he said, "If you can convince someone to loan money to you, be my guest."

So we went to a car lot, talked to the special finance guy, and were approved for the loan. Crappy interest rate, of course, but we got it. The lender filed a "statement of appearance" with the BK court, but the Trustee never even mentioned it when we had our 341. Of course we could afford to buy a car - once we stopped paying $650 a month to CCs on top of our $250 car payment, we had plenty to spare.