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Buying cars while in Chapter 13 bankruptcy

Ohio residents who file for protection under Chapter 13 of the bankruptcy code will be required to repay a portion of their debts during a repayment period that lasts three or five years. Due to the length of the repayment period, it is possible that the debtors may need to purchase vehicles before their bankruptcy cases are completed.

People who need to buy new cars while they are still in their repayment periods must do several things. They will first need to find lenders that are willing to work with them. Potential sources might be credit unions or dealerships that work with lenders who accept people with poor credit. After debtors have found lenders and dealers, they will need to have the dealers draw up buyers' orders that they can take to the trustees.

The bankruptcy trustee may deny requests to buy new cars if they are luxury vehicles. If the trustee doesn't deny the request outright, he or she may submit a motion to the bankruptcy court for the debtor to incur new debt. The creditors will then have the ability to object. If any creditors file objections, a debtor may have to go to a hearing and wait for the decision of the bankruptcy court. Once a debtor has received approval and is given an order that he or she can incur new debt, that person can take the order to the dealer and lender to purchase the vehicle.

People who are interested in filing for bankruptcy protection under Chapter 13 may want to talk to Mayfield, Ohio, Chapter 13 bankruptcy lawyers. The attorneys may review their clients' financial situations and advise them on whether Chapter 13 is the most appropriate type of bankruptcy for them, or if they might be better off filing for a different type of bankruptcy protection.

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