Getting A Newer Vehicle While In A Chapter 13 Bankruptcy
If you are currently in a Chapter 13 bankruptcy and want to purchase a new vehicle there are several things that must be done. The information below is extremely important to the success of you being able to get a new vehicle so read it very, very carefully. It is critical that you get the court’s permission before going and incurring any debt (loans) on your own. To make the process as clear as possible we have broken it up into five different steps.
What Is A Security Interest? A Debt Secured by Collateral
When you obtain a loan, in most cases the lender does not want to just give you the money, they want to make sure that you have some sort of incentive to make sure you make your payments. What better incentive is there than taking away your property if you do not pay? Therefore, creditors normally want something as collateral to ensure you repay the money they lent you; they are taking a secured interest in your property and the debt you owe them is a secured debt.
There are many different cases of secured interest. You can go to a dealership and purchase a vehicle, the lender then has a secured interest, the car that you just purchased. If you decide to no longer keep making your car payment the lender can simply come and pick up or repossess the vehicle. Put it up for auction and recoup their money. You buy a home, for whatever reasons, you no longer make the payments, then the mortgage company is going to come and foreclose (take your home back) on your property. If you go to Best Buy and get a new TV, even though you don’t sit in their office and sign a promissory note like you do on your vehicle; that credit card you used to make the purchase acts the same. Best Buy still has a secured interest on their goods (the TV that you purchased). This is what’s called a purchase money security interest.
Most debts are unsecured debts. Meaning they do not have a security interest. Most credit cards, medical bills and personal loans are without you putting collateral up for the debt. However, you know a debt is secured if you have property the creditor can come and get if you do not pay the debt.
Companies have rights just as consumers do in order to protect themselves, when you purchase something whether it be a car, a home, jewelry or furniture, companies need to know they will recover the money due to them and, therefore, use collateral as a secured interest. If you cannot make the payments, they can recover the collateral and try to sell it to recover the amount they loaned you.
Can I Get a New Apartment Lease During Bankruptcy?
You sure can! It may be a bit more difficult to find a place that will rent to you than it otherwise would be, but be patient. Depending on the rental agency, you may be required to pay a higher security deposit or even be required to have a co-signer. It really depends on the rental agency.
