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.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).