The vast majority of my Orlando bankruptcy clients do not lead lavish lifestyles prior to filing Chapter 13 bankruptcy or Chapter 7 bankruptcy.
Most of my clients are not driving brand new, top of the line cars. In fact, most Orlando bankruptcy attorneys will tell you that it is very common to have a client who is still making payments on a 5 year old car or older.
More common still is the client who owns an old car outright and is “driving it into the ground” because they can’t afford to get a new one in their current financial position.
What happens, then, when that person, filing for Chapter 13 bankruptcy, needs a new car because the old one just can’t last anymore?
This is a very common occurrence in Chapter 13 bankruptcy cases. When filing Chapter 13 bankruptcy, a debtor commits to a 3 to 5 year plan where they make monthly payments back on some of their debt to a Chapter 13 Trustee. The reasons a person would file Chapter 13 bankruptcy in Orlando are many and varied. For instance, the client might be trying to save a home from foreclosure, they might make to much money to qualify for a Chapter 7 bankruptcy, or they might be trying to save assets they would lose in a Chapter 7.
Whatever the reason, while you are in a Chapter 13 payment plan, you are not permitted to take on additional debt without the approval of the Trustee and the Court. After all, the idea behind any form of bankruptcy is to eliminate debt and get a fresh start. Taking on debt while you are in bankruptcy would seem to go against that goal.
However, there are instances where you simply have no choice about it, and you must take on debt. One of the most common instances is when the car you have relied upon to get you to and from work for the last 10 years finally dies on you while you are in the Chapter 13 bankruptcy. In this case, the procedure that would allow you to take on new debt and get a car financed is quite simple, with the help of an experienced Orlando bankruptcy attorney.
First, you would contact me, your Orlando bankruptcy attorney, and explain that “old reliable” just bit the dust.
-I would give you a list of lenders I have worked with in the past that have assisted my Chapter 13 clients with loans for vehicles.
-You would get a quote from a lender in writing and send it to me.
-I then contact the Trustee with the quote and an explanation as to why you need to take on the additional debt (like getting to work each day, for example).
-The Trustee would approve the request if it’s reasonable (I wouldn’t submit it if it wasn’t) and you get the car.
There you go.
Having said all that, from the very beginning of the case, I always encourage my Orlando bankruptcy clients to NOT rely on taking on debt to get a car. In fact, most of my clients find that, once in a Chapter 13 payment plan, it is much easier for them to budget properly and actually save up for the purchase of a car.
That’s the idea! We’re trying to break the dependence on going into debt as a way to acquire things you need, like a car to get you to and from work each day. You can, and some clients actually do, purchase a car outright while they’re in Chapter 13 bankruptcy with the money they have budgeted for that purpose!
To find out more about how I can help you with your debt situation, and if filing Chapter 13 bankruptcy is a good option for you, please feel free to contact me for a free legal evaluation of your case. 407-898-8225.
