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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2844
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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We filed bankruptcy in Central District of California on August

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We filed bankruptcy in Central District of California on August 31, 2010. We have not received a discharge yet, however, our lawyer says we shouldn't worry because the courts are taking much longer right now.

Back in December my husband and I were talking about letting our Ford Edge go with the bankruptcy, instead of catching up the payments. We were thinking it might be better to get a used car with a lower payment (our current payment is $520). So I found a dealership that works with people that have filed bankruptcy, and we submitted an application online to see if we would qualify. The dealership called us and said there shouldn't be a problem, but we would just have to wait until our BK was discharged.

Since that time (December), my husband and I decided to let our Edge go, which they repo'd yesterday, and to try to hold off on getting a used car as long as possible. My parents said we can borrow their car on days we need it.

I went online once again to try to find information about auto loans and bankruptcy. I got concerned because this time I found a few articles that said that you need to submit a written request to the Trustee to get approval to finance a vehicle. I'm now worried that me submitting an online application to that dealership in December might cause a problem with our discharge. I just pulled my credit, and the inquiry date shows "Credco Auto Reseller" on 12/29/10. I'm worried that in black and white it will look like we were actually trying to get the used car already without having the approval of the Trustee, which is not the case.

Should we write something to the Trustee explaining?

I have already emailed my lawyer, but I just wanted to hear another laywers view as well.

Thank you!

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

While in theory you should request the court for permission to obtain credit during the bankruptcy case, it is usually done in chapter 13 cases.

Terry L. :

Bankruptcy cases usually stay open for just 90 days, unless there is an adversary objection pending, or if the trustee is liquidating assets.

Terry L. :

If you received your discharge, you can get new credit though, even if the case hasn't closed. You wouldn't need permission

Customer:

We filed Chapter 7

Customer:

It has not been discharged yet... does that matter?

Terry L. :

If you do bring a motion to obtain credit, you just need to show that you'll have the funds to pay the loan, and that it is reasonable (aka not a luxury car) and necessary - if it's the only car, then it will be.

Terry L. :

These motions are generally not brought, since the lenders want you to be discharged.

Customer:

Thank Terry. So botXXXXX XXXXXne, the fact that there is a credit inquiry on my report in December shouldn't cause the bankruptcy not to be discharged. Right?

Terry L. :

You should talk to your lawyer as to why the case is not discharged yet. make sure you have submitted all documents as needed, and that you have taken your post-filing debtor education counseling course, and your lawyer filed the certificate of completion with the court.

Terry L. :

nah, no big deal.

Terry L. :

inquiries are not an issue.

Terry L. :

thanks for your question, good luck

Customer:

Thank you, XXXXX XXXXX me great peace of mind. We did take the post-filing debtor course, and the Trustee did declare us as having no assets.

Customer:

Have a great Sunday!

Terry L. and 3 other Bankruptcy Law Specialists are ready to help you