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Follow on Google News | Bankruptcy, Buying a Car, and Form 21Did you know that you can buy a car while you are in a Chapter 13 bankruptcy? Well, you can. There are procedures that have to be taken to incur the debt. The first thing that you want to do is contact your attorney’s office.
By: Bankruptcy and Credit Cards Before you have the order, you can always go and look. As long as you do not sign a contract and incur that debt, you will be ok. When you go and look, keep in mind the guidelines that the Chapter 13 trustee has set forth. You can not purchase a car for more than $15,000 with $400 a month payments over a 60 month period. Your attorney’s office may also have dealerships that will be willing to work with you. If you feel that having to do a Motion to incur debt is too much, keep in mind that you can find someone that will lease you a vehicle, and then you would not have to get permission. This may be difficult to do, but depending on who you work with, it could be possible. You can also save money and purchase a car out right. If you pay cash for a car, you do not have to go through this procedure either. I know for many this option is easier said than done. If you are in a Chapter 7 bankruptcy, then you don’t have to go through this procedure. All you have to do is find a lender that will lend you money while you are still in an active bankruptcy. It may be difficult to do. Many lenders will lend you money for a car once you have been discharged. These are the various options you have available to you while in bankruptcy. Contact your attorney’s office prior to doing anything. I had to attend a hearing this afternoon regarding a motion to reconsider an order denying a motion to reopen a Chapter 7. Luckily the motion was granted, and we got the motion to reopen granted, but it all could have been avoided from the very beginning. When a Debtor meet with his attorney’s office, he provides them with all the information needed to prepare the paperwork to file the case. Once the paperwork is prepared, he meet with the attorney’s office again to review the paperwork and make sure it is correct. It is very important to closely inspect what you are signing. Debtors need to remember that the information was imputed by a person, and mistakes are can be made. Our office had a Debtor that signed his paperwork, but didn’t closely look to make sure his social security number was correct on the Form 21. The Form 21 is what must get filed with the court to let them know the social security number of the Debtor. The trustee will then check the social security card against the social security number filed with the court. By some weird miracle, the trustee failed to notice that the numbers didn’t match. The Debtor then got a discharge and the case was closed. Once the case was closed, our office received a phone call from the Debtor upset because the wrong social security number was listed on the discharge papers. Our office explained it was easy to fix, but we would have to file a motion with the court to reopen the case to file an amended Form 21. The cost to reopen a case is usually around $650. The Debtor had to pay us the money to reopen his case. It could have all been avoided had he carefully reviewed his paperwork when he signed it saying it was correct. For more information visit http://www.bankrupcy- # # # Bankruptcy and Credit Cards distributes information through its network of websites, press releases, newsletters, and blogs. End
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