There are a few situations that may require a debtor to purchase a new car while they are in a Chapter 13 bankruptcy repayment plan. One of the best reasons is that the bankrupt debtor's car was totaled in a car accident. If a bankrupt debtor is in a Chapter 13 bankruptcy and needs to purchase a new car because his/her old car is totaled, cannot be repaired and is unusable, there are a few things a bankruptcy attorney could do to help him/her through the process.
How a Bankruptcy Attorney can Help You
The bankruptcy attorney would first file a motion requesting that the bankrupt debtor be allowed to use any proceeds from the car accident to buy a new car. Second, the bankruptcy attorney will probably request that the debtor be allowed to "sell" his/her wrecked car to the insurance company. When it comes time to buy a new vehicle, there shouldn't be any problem if the bankrupt debtor is paying cash and doesn't need a car loan.
The Debtor Must Stay in Compliance
But if the bankrupt debtor needs to finance a vehicle, the bankruptcy attorney would need to make sure that the debtor is in compliance with all the rules governing Chapter 13 bankruptcy. The debtor should not sign any car loan without making sure that he/she is in compliance with the rules of Chapter 13 bankruptcy.
Need to Speak to a Bankruptcy Attorney?
If you aren't sure if bankruptcy is right for you, it would be best to consult with a bankruptcy attorney. If you would like, you are always welcome to contact us
to set up a free consultation.