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How bankruptcy impacts the car buying process

South Carolina residents who are in the middle of a Chapter 13 bankruptcy case will in most cases need court approval to take on any new debt. Therefore, there is no guarantee that an individual currently taking part in a debt reorganization plan will be able to buy a car. However, there is a process that he or she may go through in an effort to have the new debt authorized by a judge.

The first step in the process is to find a dealer that will work with someone in the middle of a bankruptcy case. Then, the dealer should provider the debtor with a sample financing statement that shows how much will be financed and what the interest rate will be. Prior to going to a judge for approval, the statement will be shown to the trustee who is overseeing the case.

The trustee will determine if the debt is necessary and how it may impact a person's ability to stick to the current repayment plan. If the trustee approves the debt, a motion is then filed with a judge who will either approve the motion or deny it. If a judge approves the motion, a debtor is then able to buy the car under the financing terms agreed to by the debtor and the dealer.

Filing for Chapter 13 bankruptcy may be an effective way to achieve debt relief. Those who are thinking about filing may wish to talk to an attorney about the benefits of doing so. It may be possible to get an automatic stay against creditor collection actions. This may provide time for a debtor to renegotiate terms of a home or auto loan. It may also give a debtor the opportunity to surrender property with no further obligation to make payments.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
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Columbia, SC 29201

Phone: 803-764-1558
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Charleston, SC 29407

Phone: 843-509-0039
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