Q: Financing a car during chapter 13!
We recently were advised not to get a car through bankruptcy by our attorney and just to pay cash, but we can’t find anything worth the money. Are we aloud to have someone finance a car for us and we make the payments? We’re in the Middle District in Alabama.
A: Once your Ch. 13 plan is confirmed, so long as you make the plan payments to the trustee, and direct payments to your mortgage lender and perhaps your car loan, the remainder of your income is yours to do as you like. So yes, if someone is willing to risk financing a car purchase on your promise to make the payments, you may do so without running afoul of bankruptcy rules.
A: There are companies that specialize in lending to people in bankruptcy. A company that I tell my clients to check out is 722redemption.com. If you get a car, you must get the financing agreement approved by the Chapter 13 trustee and maybe the Court depending on your local rules/customs. Good luck!
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