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Purchasing a Vehicle Before Receiving Bankruptcy Discharge

bankruptcies, filing for bankruptcy, file for bankruptcy, filing bankruptcy, westgate law, southern california bankruptcy attorney, before you file bankruptcy, filing chapter 7 bankruptcy, bankruptcy discharge, discharge of debtThere are many bankruptcy petitioners who fear the consequences wreaking havoc on their ability to have a vehicle and stay mobile. Bankruptcy laws may leave petitioners aware that they can’t keep the vehicle they have currently (for a number of different reasons), but equally aware that they will need a car to get around. This leaves us pondering the question of when to buy a car. Before you file bankruptcy? After you file bankruptcy? Or is it possible to do so during the bankruptcy?

Purchasing a Vehicle After Filing Chapter 7 Bankruptcy, But Before the Case is Closed:

In the past, purchasing a vehicle before your bankruptcy case was closed wouldn’t be an option, but the climate in the auto industry is different in today’s market. While many car lenders may still want to see you reestablish credit post-bankruptcy before approving a car loan, there are those that are simply desperate to move vehicles. In some cases, that means they’ll finance vehicles that others won’t.

This issue doesn’t have a definitive answer because the choice of whether or not to finance the vehicle is that of the lender. In some cases, it might not be possible. You may attempt to purchase the vehicle and be repeatedly told that you must wait until you receive your bankruptcy notification.

The receipt of the official discharge makes a big difference because that is the point at which your debts are officially eliminated. Filing for bankruptcy stops creditor collection activity, but the debts are still there on your record indicating that you are liable for payment until the discharge is processed and the case is closed. Before receiving the discharge of debt you must attend your meeting with the court appointed trustee and allow creditors the appropriate time to object to the bankruptcy case/elimination of debt owed. The entire bankruptcy process from filing to receipt of discharge generally takes about 120 days.

If you are pressed for time and need to purchase a vehicle immediately, try contacting car lenders that have a massive inventory. Many car lenders are getting stuck with a lot more inventory than in years past and can become desperate to get them off the lot. This could provide you with the opportunity to finance a vehicle even with bad credit. Contact a couple of the lenders and ask whether or not they could approve you prior to receiving your discharge paperwork. You may even receive car loan advertisements immediately after filing that can give you a hint as to which lenders would be more amenable to providing financing in your situation.

If it ends up that purchasing a car is not an option in your situation, you may be able to find another vehicle to use temporarily. It should only take about four months in most cases for the bankruptcy court to complete the process. You can set up a used car purchase to occur within days of receiving your notification of discharge.

If you have other questions about what is possible during the filing of a Chapter 7 bankruptcy or Chapter 13 bankruptcy, please contact one of the bankruptcy attorneys at southern California’s Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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