How to Purchase a Car During Chapter 13 Bankruptcy

By Legal Editor

Purchasing a car after filing for Chapter 13 bankruptcy is sometimes necessary. It is actually fairly common for a car to be purchased during this time period. For this reason, the bankruptcy courts and trustees have made it fairly simple to buy a car after filing for Chapter 13 bankruptcy.

Talk to the attorney. The attorney who originally filed the bankruptcy case can best advise as to how to proceed and budget limits.

Locate a dealer that will take buyers currently in a Chapter 13 bankruptcy. Many times the bankruptcy attorney's office knows a few dealerships who will accept and finance people who have filed bankruptcy.

Find a car. Make sure it is reasonably priced. However, it is also important to get a car that will run for a long time, since when in Chapter 13 there's not much money available for car repairs.

Fill out the paperwork necessary. The bankruptcy attorney or trustee's office can get the paperwork needed from the seller of the vehicle. Many times this paperwork is available via the trustee's website.

Get the trustee's approval. Before buying the vehicle, the trustee's approval will be necessary. The attorney will send the paperwork over to the trustee, and once it is approved, the car can be purchased.

Keep in mind that the car is financed outside the bankruptcy. This means these payments are the responsibility of the person who purchases the car, and will not come out of the bankruptcy payments.