- Get a copy of the pre-approved loan terms from the lender. The paperwork should provide the name of the lender, the amount of the loan, the interest rate, the proposed monthly payment amount and the amount of time needed to pay off the loan. The loan terms need to be affordable based on the debtor's income and current expenses.
- Update Amended Schedules I and J of the bankruptcy petition with the latest information regarding current income and monthly living expenses. File the amended schedules with the court. The trustee will review the latest information regarding income and cost of living expenses to determine if the proposed car payments will be affordable. The trustee may object to the purchase of the vehicle if it appears to jeopardize the debtor's ability to complete the Chapter 13 plan.
- Draft a motion to purchase a vehicle or a motion to incur debt. The motion should state why the purchase of the vehicle is reasonable and necessary. The motion should also list the terms of the loan, such as interest rate, monthly payment amount, length of the loan and the total loan amount. File the motion and the document stating the loan terms with the bankruptcy court. Mail a copy of the motion to the interested parties in the case. Interested parties need to be notified of the motion to incur debt so they can file a timely objection if they disagree with the request.
- File an order reflecting the court's decision if the motion is granted. Send a copy of the order to the lender after it has been signed by the bankruptcy judge. The lender will need a copy of the signed order to proceed with the sale.
previous post
next post