If you file Chapter 13 bankruptcy, can you buy a car? How long might you have to wait? In this video, Memphis bankruptcy attorney Darrell Castle answers your questions about Chapter 13 and shopping for a new vehicle:
If I file Chapter 13 bankruptcy, can I buy a car?
Remember that Chapter 13 is a plan of repayment of your debt, and it’s going to go on for a few years. And while you’re in that plan, you shouldn’t be buying anything like cars, houses, things of that nature – because it’s a commitment to get you out of debt, and you’re supposed to commit your disposable income to repaying these debts over a period of time while you’re protected from your creditors by the courts.
And so once a Chapter 13 is finished, whether it’s 3 years, 4 years, 5 years – it shouldn’t be any longer than 5 years, because that’s the limit – then you can look into buying a car if you want to.
You probably already have a car that would be included in your Chapter 13, so that when it’s finished that car will be paid for. And at that time, if you want to take it and trade it for something and go back into debt, well you’re free to do that. The interest rate might be a little higher than normal, but you’ll find that pretty easy to do.
More questions? Contact Darrell Castle: