Posted by: admin in how to file chapter 13 on
cm_greer asked:
Ok, I have this friend who has gotten herself and her hubby in major debt. She has since talked him into filing bankruptcy. They talked to a lawyer and have decided to file chapter 13. She had a nice Tahoe that would have been paid off in 1 1/2 yrs and he has a 2005 truck. Since they are filing on their vehicles also she decided they should just get a new vehicle so they went and traded in the Tahoe for a 2007 fully loaded Chevy Suburban, which they are planning on adding into their bankruptcy. This does not seem right to me. I thought the idea of filing was to get out of debt and to help your financial situation, how can they do this, is this legal?????
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Ok, I have this friend who has gotten herself and her hubby in major debt. She has since talked him into filing bankruptcy. They talked to a lawyer and have decided to file chapter 13. She had a nice Tahoe that would have been paid off in 1 1/2 yrs and he has a 2005 truck. Since they are filing on their vehicles also she decided they should just get a new vehicle so they went and traded in the Tahoe for a 2007 fully loaded Chevy Suburban, which they are planning on adding into their bankruptcy. This does not seem right to me. I thought the idea of filing was to get out of debt and to help your financial situation, how can they do this, is this legal?????
Sounds like fraud to me.. although I am not an expert.
That is just wrong,too bad theres not somewhere you can report them.
Sounds like fraud in a sense, I don’t know much about law though
It is legal to include all your debts, but a chapter 13 is a reorganization where they will have to repay all creditors, chances are your friend will later convert the chapter 13 to a chapter 7 and try to get out from under all debt. IF the purchases was made in anticipation of Bankruptcy then the creditor who sold them the car can attempt to opt out of the bankruptcy when and if it is converted to a chapter 7. All purchase made within 90 to 180 prior to a bankruptcy filing are or can be scrutinized.
Does that help at all?
A chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
The court sets up a payment plan and during that time you can’t get credit cards or a loan without the prior approval of the trustee and/or court.
So, with that in mind, they’ll have to get the court to agree to add this into the payment plan and approve the purchase. I’m not sure if this can be done after the fact … although from your message, it looks like they have …
It’s legal, as long as they intend to pay back the new loan, which they will have to if filing Ch. 13.
However, it is beyond stupid.
I would bet that they fail out of their bankruptcy and it gets dismissed because they can’t keep up with their payments. They obviously have a very skewed sense of what is financially intelligent.
Then they’ll have their nice new Suburban repo’d, and owe even more money, and won’t qualify for bankruptcy relief again since they screwed it up the first time.
Don’t be surprised if they have financial difficulties 10 years from now. They clearly can’t learn the lessons.
Sounds like fraud by your description. We taxpayers pay for that. I would think they would take that vehicle in bankruptcy, but who knows today? Must be some other circumstances you are not aware of. Maybe the vehicle is a business vehicle or vice versa and not related to the impending bankruptcy. Remember corporations are not part of a personal debt.
That is illegal. Especially if they already filed the papers of bankruptcy. They cannot add on any new debt to their already filed papers. Her lawyers probably would advise her that they cannot add any new debt, if that fell through, this is very illegal. Tell someone who can do something. That is very unfair to people who are busting thier ***** to make ends meet and their own car payments.