Asked in Bankruptcy for Ohio

Q: I spoke to a lawyer about qualifying for bankruptcy and she said we made too much to try back in a couple of months when

I spoke to a lawyer about qualifying for bankruptcy and she said we made too much to try back in a couple of months when we made less. But my car has stopped working so i need to trade it in to buy a new one. Is that going to prevent me from filing chapter 7 in a few months? Are there any negative ramifications ?

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3 Lawyer Answers
John Martin Hilla
John Martin Hilla
Answered
  • Bankruptcy Lawyer
  • Farmington Hills, MI

A: You need to re-discuss your bankruptcy eligibility questions and options with the same lawyer or a different bankruptcy lawyer in your geographic area.

It is important to remember that virtually everyone "qualifies" for one type of bankruptcy or another (Ch 7 vs 13 vs individual 11, etc.). It sounds like you and the lawyer discussed Chapter 7 only. Chapter 13 in particular is always available if you have income flowing in.

The impact of a new vehicle purchase upon a subsequent Chapter 7 or 13 filing is something you need to discuss in private with a bankruptcy attorney, preferably before you trade in the other vehicle or purchase or lease a new one, to enable the attorney to give you good, proactive advice.

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Chapter 13 is availsble to you if you make too much money to qualify for a 7. As long as you continue to pay for and insure the car you’re about purchase, that should not negatively affect your filing later.

Kenneth L. Sheppard Jr.
Kenneth L. Sheppard Jr.
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Hilliard, OH
  • Licensed in Ohio

A: Here's your possible negative ramification: Be aware of the following 30 day rule if a car loan is obtained on a vehicle right before you file bankruptcy. If your new car lienholder does not properly perfect its lien within 30 days of you taking delivery of the vehicle, then the Chapter 7 Trustee can void the lienholder’s lien and that allows the Trustee to sell your car. You will get nothing, and you lose any money you had put down and/or the trade in value of your old vehicle. Lien date controls not issue date.

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