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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19664
Experience:  B.A.; M.B.A.; J.D.
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Can I buy a KIA car after I got my dismissal papers for my

Resolved Question:

Can I buy a KIA car after I got my dismissal papers for my bancrupcy case ?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 8 years ago.


I do not see the reason why you would need the bankruptcy Trustee's permission in order to keep a vehicle that you have purchased before filing for bankruptcy protection. This is all being done in my humble opinion for the sole benefit of the dealership and/or auto finance company. The dealership does want your auto loan to be part of your bankruptcy case because in that case, you would still owe on the car if the car is repossessed and sold for less the loan. This is different if the car were a part of the bankruptcy case where the car finance company would only get what they sold the car for.


After your bankruptcy discharge--this is an order from the Bankruptcy Court relieving you from further legal obligations to pay your debts, and then you can go ahead and purchase the car. As stated previously, the dealer does not want the auto loan to be part of your bankruptcy discharge.


Bankruptcy Dismissal is when your bankruptcy case is thrown out by the Court. This is much different from a Discharge where the Bankruptcy Court grants you the relief that you are seeking when you filed the bankruptcy case: relief from legal obligations to pay your debts-your debts are wiped out, you get a freshstart.


Customer: replied 8 years ago.
I was trying to buy the vehicle during the procedures following me filling for bankruptcy.
The dealer said 'the auto financing company' need discharge papers.
You said " the discharge papers from the Bankruptcy Court will relieve me from further obligations to pay my loan and the dealer does not want the loan to be part of it ".
Then the dismissal papers will just leave me with a very bad credit !
In this case the discharge papers are not good for them. If they sell me the car with the dismissl papers, if they repossessed it and sell it for less ,I will still owe the difference.
Is the person doing the papers from the dealership mixed up with the terms or what ?
Please , can you clarify this for me ?!?
Expert:  Phillips Esq. replied 8 years ago.


You got the issues confused here.


What I was trying to explain to you is that the KIA dealership does not want to sell you a car and finance a car that would be a part of your current bankruptcy filing. If they do, they would be taking a big risk because if you default, they can only repossess the car and not come after you for the deficiency.


What they are trying to do, which is perfectly legal is that they want to sell and finance the car after your bankruptcy discharge so that the loan will not be a part of your current bankruptcy case. In order for them to finance the deal for you, they are insisting that you get a Discharge Order from the Bankruptcy Court first. This is an Order from the bankruptcy Court relieving you from your legal obligations to pay the debts that you listed on your bankruptcy papers. This Order is issued usually 61 days after the conclusion of your Bankruptcy Section 341 Meeting. The dealership want to see this Order before they make a deal with you because they want to make sure that the deal in no way is going to be affected by your bankruptcy filing.


You do not want to receive a dismissal of your bankruptcy case. If you do, what it means is that your bankruptcy filing was for nothing. You did not get any relief; that you still owe the debts that you listed on your bankruptcy papers because the bankruptcy Court did not grant you the relief that you were seeking.


Customer: replied 8 years ago.
The car is not part of my bankrupcy filing. It never was. You are wright, the filing was for nothing, I got no relief, I stil owe the debts but I am in a diferent situation now( I have a job, good income,etc...). That's the reason I said, now, if they sell me the car and I do not make the payments, they can repossesse it and I will be responsible for the difference.
THANK YOU for your answers !
Expert:  Phillips Esq. replied 8 years ago.
Phillips Esq. and 2 other Bankruptcy Law Specialists are ready to help you