You have a pending Chapter 13 bankruptcy in Southern Maryland and your car has died or needs a huge repair. You may be surprised that you do have the option of getting a loan to buy a new or used car. What shouldn’t surprise you is that it is a bit of a pain, and it does take some time. It may seem a little overwhelming, but it can be done if you follow the rules.
While your Chapter 13 case is pending you need to get permission to incur new debt. As with anything in a bankruptcy case, this takes some time. To make it go as smoothly and quickly as possible it helps to understand what type of loan is likely to be approved and to work with a dealership that knows what you are doing.
If you filed your case in Greenbelt your Trustee is either Timothy Branigan of Nancy Spencer Grigsby. They each have their own way of dealing with a request to incur debt to buy a car, but they both follow similar rules about types of car loan they will approve. They want to make sure the car is good basic transportation and the loan is affordable.
The rules are pretty basic. No Luxury Vehicles: Loans should be no more than $25,000, monthly payments no more than $500. The Chapter 13 plan must be confirmed unless there is an emergency. Keep in mind that while these rules may limit your options our goal is just to get you a vehicle that will get you back and forth to work until your case is over. Don’t look at a Camry or Contour when a Corolla or Escort will do. If the dealer has a fully loaded model that has 50,000 miles on it, try to find a newer model with fewer options that only has 10,000 miles on it.
After you have picked out the type of car you have go to a dealership and talk to the finance person. Make sure they understand you are in a Chapter 13 and you need to get the contract information to submit it for approval. It is a pain, but try to shop around as the interest rates on these loans can vary from dealership to dealership.
With Mr. Banigan we need to file a motion with the Court to get this approved by a Judge. With Ms. Grigsby office she will let you submit the request directly to her by fax. Her Instructions To Incur New Debt and her Form To Incur New Debt are available on her website. If your Trustee is Mr. Branigan you can use this form and give it to us so that we will have the information we need to file the motion with the Court. Just don’t fax the form to Ms. Grigsby.
If we have to attend a hearing on your request we will be going to the Court House. To get to the Court House at 6500 Cherrywood Lane, Greenbelt, Maryland you will go back around the beltway to exit 23 Kenilworth Avenue just like you did for the Trustee meeting. Turn right onto Kenilworth and turn left at the 3rd light Cherrywood Lane. The Court House will be the first building on your right. The entrance is marked by a guard gate and both. As you go enter there is a small parking lot on your right. If that lot is full you can continue around back where there is a parking garage with additional parking. Your will enter the building thru security and a metal detector in a large atrium area. When you get thru security there are elevators and escalators off to the right. The bankruptcy courtrooms on the third floor. Make sure you take notice of the name of the Judge and courtroom before you go so you will know which courtroom to enter. The Courtroom will you usually open about 10 minutes before the hearing so you can go in and check in with the clerk so they know you are there.
By the time this is all done, and your loan is approved, you may find that the vehicle you picked out has been sold. But don’t worry the order from the Judge, or the approval from Ms. Gigsby will cover that vehicle or a similar vehicle.