Many people going through a Chapter 7 Bankruptcy often have unanswered questions. The laws surrounding bankruptcy have changed over the years and can even differ from state to state. The best advice for an individual that has any questions or concerns is to always run it by their bankruptcy attorney prior to taking any action.
One question that has come up often when someone is considering filing a Chapter 7 Bankruptcy is, Can I buy a new car? In a nutshell, yes they can as long as they run it by their bankruptcy attorney first, and then of course, as long as they are able to make the payments. The thing to keep in mind is that this may raise a red flag for the trustee so make sure that your attorney gives you the green light and also make sure that you don't buy anything extravagant. How would this look if someone is preparing to file Chapter 7 and just prior to filing buys a brand new expensive luxury car? On the contrary, if the individual is in desperate need of a new car in the immediate future then it is perfectly legal to buy one. The individual should make sure that they have the down payment without having to borrow the money or use their credit cards. Again this will be frowned on by the trustee during the creditor's meeting and could potentially cause problems for the debtor. If the debtor can keep up with the payments on the vehicle and is willing to reaffirm that debt in the bankruptcy filing then there should not be a problem with the purchase. During the bankruptcy process all of the debtor's assets and property will become property of the bankruptcy estate. This means that anything that is not protected by the bankruptcy exemptions can be sold to pay off the debts owed. However, if the debtor reaffirms the debt, in essence, agrees to keep the car and continue to make the payments, then the trustee will usually agree to this as long as it appears the debtor will be able to afford the payments.
These days even a simple Chapter 7 Bankruptcy can be complicated due the changes to the bankruptcy code. Having an experienced bankruptcy attorney to guide one through the sometimes convoluted laws and regulations is very important for a successful and hassle free bankruptcy discharge.
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