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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I want to buy a car before I do my bankruptcy, is this going

Resolved Question:

I want to buy a car before I do my bankruptcy, is this going to cause a problem with the bankruptcy?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Are you planning on buying the car outright, or are you planning on financing the car?
If you file a Bankruptcy, will you continue to pay the car loan?
Customer: replied 5 years ago.
We need a loan, we were not planning on including the loan in the BK, we plan on making all required payments.
Expert:  cfortunato replied 5 years ago.

If you get a car loan, and file a Bankruptcy within 90 days of getting the car loan, you may not be able to have the car loan discharged. This should not present a problem if you continue to pay the car loan. But if something unforeseen occurs, and you can no longer pay, the lender can collect that money from you.

Because of this possibility, if possible, it would be better to wait at least 90 days after getting the car loan to file a Bankruptcy. This way you can continue to pay the car loan, but if you cannot, the lender cannot try to collect the balance of the loan from you.


I think this is what you wanted to know. If not, please let me know.
Thank you!

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Customer: replied 5 years ago.
The lender would then repossess the car if you discharge the loan in the bankruptcy?
Expert:  cfortunato replied 5 years ago.

Thank you for accepting my answer! And thank you for the bonus!

When you get the car loan, you should carefully read the paperwork. Some car loan lenders put language into the contract that will allow them to repossess the car if you file a Bankruptcy, even if you are making all the payments on time - unless you sign a re-affirmation agreement.

Signing a re-affirmation agreement means the loan is not discharged in the Bankruptcy, and you are agreeing to remain liable for that loan.

If your car loan contract does not have this language in it, the lender cannot re-possess the car if you file a Bankruptcy and do not sign a re-affirmation agreement, as long as you continue to pay the car loan.

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