Yes! First of all, you can buy anything for cash, no permission is needed – but – you need written permission from the court to get a new loan or new credit while you are in a chapter 13 bankruptcy. The court wants to make sure you are not doing something that will jeopardize your ability to complete your chapter 13 Plan.
1. Find a dealer or car lot that is willing to sell you a vehicle and can get you financed.
Before anything is finalized, I will need the details of the sale; the year, make, and model of the vehicle, the selling price, the amount of the monthly payment, the interest rate, and the total cost. You (or the dealership) can email or fax this information to me.
2. I will file a motion with the court to get approval for you to purchase this vehicle or one similarly priced. The approval will take thirty (30) days from the date the motion is filed.
3. Once the court approves the purchase, you can take a copy of the court order to the dealer or car lot, finish the process, and pick up your vehicle. This vehicle payment will not be included in the bankruptcy payment. You will pay for this vehicle direct to the new finance company.
In most cases the trustee will want to know where you are getting the money to pay for the new vehicle. When we prepared your budget, you did not have any money left over to pay your unsecured creditors, so they received nothing in the bankruptcy. Now you want to buy a vehicle and pay an additional few hundred dollars per month. The trustee will want to know where this extra money is coming from, and he may want you to pay some additional money to your unsecured creditors. This is usually not a problem if your vehicle was wrecked or quit running, since you were already making a vehicle payment in the bankruptcy case and that money will now go to the replacement vehicle.
If you are in a chapter 13 bankruptcy and for whatever reason, need to finance another vehicle, you have options. Let’s discuss your specific situation and what we need to do to get you taken care of.