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Buying a New Vehicle while in Chapter 13 Bankruptcy

Transportation is such a necessity, especially for making money to fund a Chapter 13 Bankruptcy.  What if you are in a Chapter 13 Bankruptcy, and your current vehicle no longer is operational or needs replacing?  This article details the process of obtaining a new vehicle while you are in Chapter 13 Bankruptcy; this process is very similar despite who your trustee may be, but I focus on Fred Long’s process, as he is the Chapter 13 Bankruptcy Trustee here in the Eugene area.

The first thing that you must do is obtain a copy of the vehicle request form (Vehicle Request – Fred Long) and  bring it with you when you are looking for a vehicle.  If you have found a vehicle, and found financing, you will want to complete this form, and send it to me to forward to the Chapter 13 Trustee for approval.  Generally, the Chapter 13 Trustee will approve the purchase of reasonable cars, not luxury cars (such as a Hummer, or a Mercedes-Benz).  If the vehicle is priced under $14,000 and the monthly payment is around $350 or less, and your budget can afford this payment and there is a real need for the vehicle, the Chapter 13 Trustee should approve the purchase.

The approval of the vehicle request is good for only 60 days.  If you do not obtain the vehicle within the 60 day period, you will need to re-submit a new vehicle request form to the Chapter 13 Trustee for approval.

As part of the process, new budget schedules must be submitted to the Chapter 13 Trustee to demonstrate that you can afford the vehicle in your current budget.  The turn around time for the Chapter 13 Trustee to approve a vehicle purchase once the form is submitted can be as little as 2-3 days from my experience; sometimes this period is longer, though.

 

Tom Butcher

Tom Butcher

Tom Butcher is the owner and attorney at Butcher Law Office, LLC. He represents clients in financial distress in Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Tom offers a friendly, respectful, and compassionate experience for clients who are in financial and legal distress. Rather than taking a mechanical approach to filing bankruptcy for clients, like other bankruptcy firms, Tom strives to offer a personal, one-on-one experience, where the client’s situation is of utmost importance. Tom believes this personal attention keeps him connected to the community, and serves his clients best during their bankruptcy.
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