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  1. #1
    Join Date
    Jul 2018
    Location
    Chester County, PA
    Posts
    3

    Question What Happens if You Buy a Car After Filing for Bankruptcy

    My question involves bankruptcy in the state of: Pennsylvania.

    I've been sued by a credit card company. I've submitted an answer, and also been thinking and preparing for a likely filing of Chapter 13. The date of my arbitration meeting with the creditor is in a couple of weeks (around August 10). I was advised to file before then.

    At the same time, my car broke down and we've been saving up to get another used vehicle. I've not been able to make a purchase yet. We've saved about $5k for this car. I don't know if I'll have time to find and get a good deal on a car by the time I file for Chapter 13 bankruptcy protection.

    Will I encounter problems with the court's approval of my Chapter 13 filing if they see that $5k that was in a bank account when I filed, was later used to buy a car (which I need to get to the office)?

    Thanks.

  2. #2
    Join Date
    Jul 2018
    Posts
    559

    Default Re: Will Buying a Car After Filing - but Before Approval - Cause Problems

    This is a question for your BK attorney. You may be able to exempt the cash or whatever equity you have in the car. However, that depends on what other assets you have that you might seek to exempt. You might want to google "pennsylvania bankruptcy exemptions" and do a little reading. And, obviously, getting a car loan will be difficult or impossible if you have filed for BK.

  3. #3
    Join Date
    Jul 2018
    Location
    Chester County, PA
    Posts
    3

    Default Re: Will Buying a Car After Filing - but Before Approval - Cause Problems

    Thanks for your opinion.

  4. #4
    Join Date
    Oct 2006
    Posts
    14,679

    Default Re: Will Buying a Car After Filing - but Before Approval - Cause Problems

    Yes, you should verify my answer with your bankruptcy attorney. You are permitted to have transportation for work. 5k for a car is within pretty much all exemption levels within even the strictest of states. I do not think that this is going to be a problem for you unless you own another car that could provide your transportation.

  5. #5
    Join Date
    Jul 2018
    Location
    Chester County, PA
    Posts
    3

    Question Re: Will Buying a Car After Filing - but Before Approval - Cause Problems

    My wife and I do have another car, that she uses to go to work (2 - 3 days per week), to go shopping, and transport our children. I don't remember if that other car is in my name or her name. Having one car is not feasible. There is no public transport where we live.

    So when I go file, and the court sees $5k in my bank account, I can just tell them I have it reserved to buy a car, and they will not force me to use it to repay my creditors?


  6. #6
    Join Date
    Jul 2018
    Posts
    559

    Default Re: Will Buying a Car After Filing - but Before Approval - Cause Problems

    Quote Quoting jpg
    View Post
    So when I go file, and the court sees $5k in my bank account, I can just tell them I have it reserved to buy a car, and they will not force me to use it to repay my creditors?
    Did you "google pennsylvania bankruptcy exemptions" as I suggested? Most states have multiple categories of exemptions, including for some amount of cash in the bank, automobiles, personal effects, etc.

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