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Should I buy a new car before filing Chapter 13?

Advantages for Buying Newer Car Before Filing Chapter 13

Many of you visiting bankruptcy forum websites continually raise the question about whether or not to purchase a new car prior to filing a Chapter 13 bankruptcy. A Chapter 13 is a type of bankruptcy where you, as a wage earner, makes a 3 or 5 year plan to pay back part or all of your unsecured debt with disposable monthly income. Five years is a long time to successfully operate a plan when you have vehicles you depend on getting you back and forth to work that are not reliable.

As an example, consider this bloggers question recently raised on a bankruptcy forum website: “We are planning to file Chapter 13 in the coming months. Our car situation is as follows:

I’m not sure if mine and my wife’s car will make it through a 5 year plan. Can we trade in both my wife’s and my car for newer cars? Or should we keep the cars and hope they make it through or deal with it in the 13 if they don’t make it?”

There is really not many advantages for keeping your old car during a Chapter 13 payback plan. Here are some advantages for buying newer vehicles before you file:

Only about one third of Chapter 13 bankruptcies succeed. Most bankruptcy trustees are interested in your success because that is how they make their income. There is no need making a Chapter 13 any harder than it has to be for success. Having a reliable vehicle during a Chapter 13 is one of the most important things you can do in order to give you a chance to succeed.

Choosing an experienced bankruptcy attorney is another thing you can do to give yourself a chance to succeed. We can help you find an attorney in your area.

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