New Auto Blues and Motion to Incur Debt
While in active Chapter 13 bankruptcy, you are required to file a Motion to Incur Debt before you can purchase a vehicle. It is very important that you are in need of purchasing another auto because the Chapter 13 Trustee will require justified reason for purchase. Being bored with current vehicle and just wanted to get something newer is not a justified reason. Vehicle not running, continual costly repairs to keep vehicle running or totaled in accident are the most common reasons to replace vehicle while in bankruptcy.
The filing fee for motion, recent pay stubs, updated list of monthly expenses and statement of your intent for the auto your are replacing and why you are needing incur loan for another auto are items required by attorney before filing of motion. Your income and budget information will be updated and filed with motion to justify the expense in your budget. If you are surrendering a vehicle in order to purchase the newer vehicle then a plan modification will also be required to make your Chapter 13 bankruptcy plan sufficient.
Consult with your attorney’s office to see if you will qualify to purchase another vehicle. It is a good idea to visit some dealerships to get preapproved for a loan. Even if you have an order granting you permission to incur loan from the bankruptcy courts will not guarantee you will be able to gain lender approval for auto loan.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
