“My car is on its last legs, but I need to file bankruptcy, can I buy a car right before I file?”

The answer to that question is yes. If you need a car, you should buy one before you file bankruptcy because after you file, the bankruptcy case is going to be a lot harder for you to get credit.

The bankruptcy courts recognize that debtors need to have transportation in order to work and manage their daily affairs, so it’s generally considered an acceptable form of pre-bankruptcy planning for you to buy your car before you file bankruptcy.

Now, if you’re going to be filing a Chapter 13 case your net income is going to be reduced by the amounts of your car payment, so if your car has previously been paid off and now you have a car payment and you’re going to go into Chapter 13 in effect, the creditors are going to be paying for your car.

Still bankruptcy courts allow this because debtors need to have transportation so they can maintain their jobs, so they can pay on the Chapter 13 plan and so that creditors can realize something.