Life without a car can be quite inconvenient these days. Most people are extremely dependent on cars for going to and returning from work.
31
December
2010
Stacy B Miller's picture

Life without a car can be quite inconvenient these days. Most people are extremely dependent on cars for going to and returning from work. You might be planning to buy a new car since your old one is on its last legs. However, if you are contemplating filing bankruptcy then you must be aware of certain things before you proceed. Read on to get the details:

Do you have a loan on your car or you have complete rights over it? In case there is a loan on your car, it might not be wise to lend money for a new vehicle. You would just be buried under more debt and your situation would worsen. Nonetheless, you might consider buying a cheap second-hand car provided it is in a good condition. If you are determined to buy a new car then have a talk with your attorney before taking the loan in order to understand the possible consequences of your action.

Another possible situation is that you have a car with a loan on it which your vehicle is out of order or in poor working order. In that case you can surrender your car in bankruptcy and buy a new car once you are out of it. This is your option if you are filing chapter 7 bankruptcy. Of course, you will be charged a higher interest than usual but then someone with a bad credit owing to missed payments will suffer the same fate. Things are different if you are going to file chapter 13 bankruptcy. You would need to have the permission of the bankruptcy trustee if you are buying a car on loan. In fact, it is mandatory to seek the permission of the trustee before getting into a new debt. May be the trustee will approve your plan but are you sure that you can pay your existing creditors as well as the make payments towards the new car loan?

The best option for you is to buy a used car with cash. Yes, this is a difficult thing particularly during bankruptcy. But further loan will bring a lot of complications along with it. So try to opt for this option if your circumstance permits it. It will suit both your present and future.

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