A bankruptcy debtor may buy a car with cash during an open Chapter 13 case without permission from the trustee or bankruptcy court.
As always, it is advisable to speak with your attorney before making a large cash purchase during Chapter 13 bankruptcy.
Can the Chapter 13 trustee find out if I got credit?
You’ll need court authorization.
Check your court or the website of the Chapter 13 bankruptcy trustee. The court might dismiss your case or refuse to include the new debt in your plan. You won’t be able to discharge it if you can’t pay it.
Who will finance a car while in Chapter 13?
Some lenders have stepped in to offer open bankruptcy car loans to fill this lending gap. To qualify for a car loan during a Chapter 13 bankruptcy, a borrower has to be current on their repayment plan and one year has to have passed since the filing date – unless they included any existing auto loan in the bankruptcy.
Can you trade in your car for another car while in Chapter 13?
Can I trade in my old car? Yes, you can, but it is up to your car creditor to agree to it. Before, your car creditor received only a monthly payment by the chapter 13 trustee which stretched out over the length of the plan (usually 5 years) with the courts interest rate, currently 5.04%.
Photo in the article by “Mount Pleasant Granary”