If you’re in the middle of a Chapter 13 bankruptcy in New York and you find you need another vehicle, you’re in luck. Because Chapter 13 is a process that lasts either three or five years, there are rules in place to help you get a car if you need one before your bankruptcy is discharged.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a reorganization bankruptcy which allows you to repay your creditors, either in full or in part, over the course of a three- or five-year repayment plan. Your bankruptcy trustee helps you to come up with a workable repayment plan, which typically allows you to keep more of your non-exempt property, including a vehicle, than a Chapter 7 bankruptcy.
However, because this process is fairly long, the courts recognize that something could happen that makes a new car necessary. If this has happened to you, there’s a process in place to help – but it’s not as simple as heading down to the dealership and getting a loan. There are a few steps you need to follow in order to get the vehicle you need.
Getting a Car in New York City in a Chapter 13 Bankruptcy
If you find you need a car during this time, your first step is to get permission from your bankruptcy trustee to take on additional debt. In order to do this, your trustee files a motion to incur debt with the court, which requires specific information about the vehicle and loan you’re considering.
This means that you need to find a dealership in New York City that works with bankruptcy auto loans. Not all dealers are signed up with lenders that offer these, so finding one could take some searching (more on this later). When you find a dealership that works with lenders that have bankruptcy car loans, you need to get a sample buyer’s order.
A sample buyer's order is a regular buyer’s order that lists the details of the vehicle and the loan you might qualify for. The dealer fills this out with your information as well as the year, make, model, and price of the car, and the interest rate of the loan.
This sample buyer's order must include two very important details:
- The words “or similar” by the make and model.
- The highest possible interest rate you could get.
The reason for this is that if you’re approved for the additional debt and the vehicle you picked out has been sold, you have to begin the process from scratch. The same is true if the lender charges a higher rate interest rate than the court approved. With these two simple stipulations, though, you’re protected from having to go back to the court for re-approval, which could take a lot of time.
Finding a Bankruptcy Auto Loan in New York
Now that you know it’s possible to get an auto loan in New York during a Chapter 13 bankruptcy, your next step is finding a dealership with lenders that offer bankruptcy car loans. At Auto Credit Express, we can help with that.
We’re teamed up with a large network of dealers all around New York and the nation that have the lenders to work with people in unique credit situations. To get the process started today, simply fill out our free, no-obligation auto loan request form, and we’ll get to work matching you with a local dealership.