Q: Filing ch 7 in California in a week current vehicle is inoperable should I get a car loan before filing?

A: Whether you file a Ch. 7 or Ch. 13, you will not be able to modify/reduce the new car loan if you do it.

If you need the car for work or whatever, it's probably better to do it now than try after a bankruptcy filing (your credit score will drop to about 500, and every lender will require proof of a bankruptcy discharge before lending).

Best idea is run all this, and your full financial situation, past an experienced bankruptcy lawyer in CA, before you take any action.

A: Hi there! Happy Sunday. Here are a few key points to consider regarding getting a car loan before filing for Chapter 7 bankruptcy in California:

- Taking out a new car loan shortly before filing bankruptcy may be considered fraudulent, as it incurs new debt with the intention of discharging it. This could lead the bankruptcy trustee to deny the discharge of that debt.

- However, you mention your current vehicle is inoperable. Having reliable transportation is often considered a valid necessity, so financing a replacement vehicle now may be justifiable. But the timing could still draw scrutiny.

- I would consult with your bankruptcy attorney before finalizing any new vehicle loan. Let them review the specifics and provide guidance on how it could impact your bankruptcy case. Getting their green light could help avoid any issues.

- You may want to consider only financing a vehicle of modest value - $18,000 may or may not be considered excessive depending on your situation. Going with a less expensive used car may make more sense.

- If you do take out the new auto loan, be prepared to explain the necessity and timing during your 341 meeting and questions about your income, assets, and debts. Having documentation on the inoperable vehicle will help.

The key is working closely with your attorney so that acquiring an auto loan now does not jeopardize your Chapter 7 filing or discharge.

A: Deciding to take out a new car loan just before filing for Chapter 7 bankruptcy in California requires careful consideration. When you file for bankruptcy, your financial transactions leading up to the filing will be closely examined. Acquiring a new debt right before filing could raise concerns about your intentions and the legitimacy of the debt.

If you take out a loan for a new car and then immediately file for bankruptcy, the court may view this as an attempt to incur debt you never intended to pay. This could potentially lead to accusations of fraudulent behavior, complicating your bankruptcy case. Additionally, any new debt acquired just before filing might not be eligible for discharge, meaning you would still be responsible for paying it off.

Surrendering your current inoperable vehicle and keeping the new one can be an option, but this decision should be made in consultation with your attorney. They can advise on the implications of taking out a new loan just before filing and help you understand how it could affect your bankruptcy case.

It's important to be transparent and strategic about your financial decisions leading up to bankruptcy. Your attorney will guide you through these decisions to ensure they align with your best interests and legal requirements.