Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Would your parents be able to claim - if necessary - that the newer car was needed because the older car is unreliable?
If there is a good reason for getting a newer car, it will be okay that they use some of the money in their account to purchase a newer car. The fact that the older car is having issues is a good reason.
However, if it can be determined that the intention of the purchase was to avoid paying the money to creditors or to the Bankruptcy court, the Bankruptcy court can reverse the transfer (take the car, sell it, and keep the money that came out of the bank account to purchase it).
If there is a good reason for getting the car, the purchase will not have to be accounted for on the Bankruptcy petition. However, Bankruptcy trustees sometimes ask for bank statements for the 6-month period preceding the filing. If the car is purchased more than 6 months before the filing, it will be less likely that they will have to account for the withdrawal.