Need a new car? Are you currently in a Chapter 13 case in Cleveland? Let’s face it, things wear out. I’m not talking about us. Chances are that if you are in a chapter 13 case you probably don’t have the latest model car, or the car you have is not in the greatest shape. On top of that the budget the Chapter 13 Trustee allows gives very little room for vehicle upkeep and repairs. Gas, oil, that’s about it. So things wear out, breakdown, and leases expire.
How do you get a new car? You aren’t allowed to take on new debt over $500. It says so right in the plan and the red book the Trustee, Craig Shopneck, sent you. The Judges in the Cleveland division of the Bankruptcy Court understand that this is enough of an issue that they have created a standardized protocol for buying or leasing a vehicle while you are in a chapter 13.
Motion to Lease or Purchase Vehicle
The way to address this matter is by filing a motion with the court. This is something that your attorney should do for you. As with everything else in a Bankruptcy case these days it is all about paper. A successful Motion to Lease or Purchase a Vehicle in Cleveland should include:
- The proposed contract. For an automobile purchase or lease the dealer will not give you this document. Heck, he doesn’t even have it until the day you go in to sign on the dotted line. The court will accept a deal sheet made out by the salesman.
- A statement of the basic terms of the deal. Include amount borrowed, loan or lease terms, amount and source of down payment, and interest rate.
- The reason for the proposed lease or purchase.
- Comparison of your existing transportation costs to the anticipated new costs.
- If new cost is higher explain how you are going to cover the increase
- If it is lower, explain how you intend to apply the additional disposable income (they get you coming and going).
- A statement of any connection you might have with the lender or Lease Company, or an affirmation of no such connection.
You might also want to prepare and file an amendment to schedule J and Summary of Schedules to support the Motion if needed.
Although this is a reality in a chapter 13 case, it is a complicated process. Don’t be surprised if the chapter 13 trustee objects or the Judge adjourns the hearing. They want exactly the information described here. If one of the items does not apply to your transaction you will have to explain why it is not included.