Buying a car right before filing for bankruptcy

When your car breaks down it’s usually at exactly the wrong time, like right before you plan on filing for bankruptcy. If you buy a car right before you file, make sure you can exempt it. Check your state or federal exemption limits to make sure the new car won’t be worth more than you can protect in your bankruptcy. If the car is worth more than the exemption limit, your trustee may seize it and sell it to pay your creditors.Also, if you get a car, you’ll have to wait until the lender files the lien. If they don’t file it within 30 days and you file your bankruptcy within 90 days of buying the car, the trustee may be able to take the car and sell it. Even if the lien is filed within 30 days of purchasing the car and you wait 90 days to file, if you pay more than $600 in the 90 days before you file, the trustee may be able to take the payments back from the lender.Even if you can keep the car, you may be asked to reaffirm it. This means that the lender will ask you to re-sign for the loan and that debt won’t be wiped out in the bankruptcy. Most lenders will allow you to keep making payments without reaffirming the loan, but some will repossess the vehicle if the loan isn’t reaffirmed.Buying a car right before you file can be tricky, so it’s always safest to wait until after your case has closed to purchase a new car.