Mechanically, many of today’s vehicles last eight years, ten years, or even longer. However, after about six years, the cost of ownership gets too high. The direct expenses, and indirect economic and noneconomic costs, associated with repairs often exceed the vehicle payments.

Typically, a Chapter 13 bankruptcy lasts five years. So, even if you drive an almost-new vehicle when you file, you will probably need a replacement vehicle before the judge closes the case.

Because of monthly debt consolidation payments, resources are usually scarce during Chapter 13 bankruptcy. Additionally, the bankruptcy judge must approve additional expenditures which are significantly above the ones originally declared in Schedule J. In other words, from both a financial and legal standpoint, it’s not easy to buy a car during a Chapter 13 bankruptcy.

However, these things are not impossible either. You just need the right kind of Athens bankruptcy lawyer to pull everything together.

Preliminary Matters

Unfortunately, some debtors rush ahead to the legal portion before they cover the financial portion. You must remember that the judge might grant permission to buy a certain car, but the judge will never give blanket permission to buy any car.

So, you must first select a vehicle, and an Athens bankruptcy lawyer can help. Before you begin seriously looking for a vehicle, plan your budget accordingly. You’ll need to make a down payment as well as monthly payments. Your auto insurance rates and other collateral costs, like gasoline, might go up as well.

The down payment could probably be a gift. Most auto finance companies don’t ask too many questions about the source of a down payment. But as for the other expenses, you are probably on your own.

With this budget in mind, an Athens bankruptcy lawyer can direct you to dealers and financers who work with damaged-credit buyers. Your selection might be limited, and you might pay more than other buyers, but in the end, you’ll probably find the vehicle you need.

Most dealers and finance companies draw up dummy sales contracts in these situations. The contract contains all the financial and non-financial details necessary for the following steps.

Winning Over the Trustee

If the trustee (person who oversees the bankruptcy for the judge) agrees with the purchase, the rest of the process runs much more smoothly. If the trustee doesn’t agree but doesn’t object either, that’s better than nothing. If the trustee objects, you probably need to go back to the drawing board.

Trustees often suspect fraud in these situations. If the debtor suddenly has a lot more money in the monthly budget, the trustee will understandably want to know where the money is from. Many people get second jobs to fund their new vehicle payments. Additionally, an Athens bankruptcy lawyer must convince the tr4ustee that the vehicle payments will not affect the debtor’s ability to make the monthly debt consolidation payment.

Once the trustee is on board, it’s usually safe to proceed to the next step, which is winning over unsecured creditors.

Winning Over Unsecured Creditors

Credit card companies and other unsecured debtors usually receive little or nothing in a Chapter 13. So, if the debtor comes up with more money, they often object to purchases. They argue that the debtor should spend this money to retire debt instead of buying a new car.

To change their minds, an Athens bankruptcy lawyer typically has two options. One is to offer a partial debt reaffirmation. The debtor agrees to repay part of the obligation. For practical purposes, the debtor need not make payments on this partial reaffirmation until after the judge closes the case. The Automatic Stay prohibits adverse action until then. This offer is often enough to convince unsecured creditors to back off.

Alternatively, an Athens bankruptcy lawyer can take a hardline approach. A deal’s a deal, and the repayment agreements, if any, are already in place. Therefore, especially if the trustee fully agrees with the new vehicle purchase, opposing a motion to incur additional debt simply makes the creditor look greedy.

Filing a Motion to Incur Additional Debt

After all this, it’s finally time to file a motion to incur additional debt. This motion must include all the financial details about the proposed purchase. If no one successfully objects to the motion, the judge will probably grant it, as long as the terms aren’t completely one-sided, the debtor needs a new vehicle, and the chosen vehicle is a reasonable replacement.

The “reasonable replacement” requirement is usually the big one. A luxury SUV is not a reasonable replacement for a large vehicle during bankruptcy, even if the purchaser got a very good deal.

Please be aware that this article was written and published in conjunction with the help of Gorilla Webtactics, Law Firm Marketing Agency, and does not contain legal advice. Please do not act or refrain from acting based on anything you read in this article.