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Filing bankrupcy can I buy a car?

Medford, OR |

I am filing for bankrupcy and I was wondering if it would still be okay to buy a car from one of the car dealerships that don't sell by credit scores. I havent started the process yet but I will in the next few weeks so not sure if its okay to do it before I file, while processing paperwork, any time, or not at all. Please help. Thanks

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Attorney answers 4


If you intend to file bankruptcy, the court will be looking at all of your assets. If you "need" a vehicle, you can absolutely purchase a vehicle. However, it would be best to consult with an attorney before you make such a purchase to discuss the specifics of the value and expense of the vehicle, along with a discussion of all of your other assets.

The above information is not intended as legal advice. If you have any legal questions consult with an attorney of your own choosing.


yes , you can do it before you file. Just don't get an expensive car with a high monthly payment. Here in Pa we like to see them $350 per month or less. You can get cars here in Pa after you file, but there are 2 different chapters. In a chapter 7 you need to wait untl after discharge approx 4 months. Your interest rate couyld be higher because of the bankruptcy. In a ch 13 you cannot get one without a trustee letter which they will not do until after confirmation of you plan approx 5-7 months. Here they will only do a letter to the car dealer if you are current with trustee payments and can explain where the money for the monthly payment was coming from. Remember in the ch 13 you were supposed to be using all disposable income to fund the plan


Not only is it okay to buy a car before you file bankruptcy, if you don't have a safe working vehicle, I would recommend that you get a car now. I would urge you to complete your pre-bankruptcy credit counseling program first, because it will give you some guidelines about how much you should be willing to pay on a vehicle loan.

Hope this perspective helps!


I think the answer depends of whether you plan on financing the purchase. If you purchase a car for cash before the bankruptcy then that vehicle becomes a asset of the bankruptcy estate post petition - that asset can be protected depending on your states exclusions and the ultimate vale of the car. It depends on the rest of your facts. If however you finance the car the car will likely have security interest maintained by the financier or seller which will take priority. Therefore the vehicle is somewhat protected by the priority claim of the Seller/Financier.

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