Can I buy a car while in chapter 13?
The general rule while in a Chapter 13 bankruptcy is that you are unable to incur any additional debts. This means that credit cards, loans, check-cash advances, and other debts are off limits. If you are in need to finance a vehicle, the loan needs to be approved by the court. This requires the filing of an application to incur additional debt and approval by the trustee.
There must be a good reason to finance a new vehicle while in a Chapter 13. If you had a paid vehicle that recently died and are need of a new vehicle to get to work, care for children, or other necessities, you should be able to obtain court approval. However, even the need for a new vehicle does not allow you to go beyond your means. The financed vehicle should be reasonable and should be limited to have a minimal impact on the creditors you are paying back in your Chapter 13 case.
Since the procedures to financing a vehicle in a Chapter 13 plan can be complex, you should seek the help of an attorney to explain and guide you through the process. If you are in a Chapter 13 bankruptcy without an attorney, you may wish to seek an affordable bankruptcy lawyer in Elizabethton, Johnson City, Kingsport, or surrounding areas to explain the process and give you options about buying a car while in Chapter 13.