Bankruptcy

Financing Car Purchase During Chapter 7 Bankruptcy

By Jonathan Alper

Many Chapter 7 bankruptcy clients would like to surrender a car and escape an upside-down car loan, but they are afraid they will not be able to buy a replacement car. Many people have destroyed their credit by the time they consider bankruptcy and believe no one will loan them money to buy a car after there a bankruptcy filing appears on their credit report. I recently attended an attorneys luncheon in Orlando, Florida where one of the attorneys said many of her bankruptcy clients obtained car financing after surrendering an upside-down car in a Chapter 7 bankruptcy.

The attorney said that Payless Car Sales in Fern Park, Florida (Orlando suburb) has a relationship with a lender who will finance used cars purchase by people in bankruptcy. The lender will approve loans to bankruptcy debtors who have no history of car repossessions. It does not matter that the debtor elects to surrender a car to a prior lender after the debtor files bankruptcy. Interest rates are approximately 18%. Buying a car which is not upside-down at a high interest rate is usually preferred to reaffirming an upside-down car at a lower interest rate because the monthly car payment is lower for the less expensive car.

People considering bankruptcy in central Florida who may want to surrender a vehicle in bankruptcy and then buy a replacement car may want to contact Bill Anderson, owner of Payless Car Sales, 407-599-7253.

To date, non of my own clients have told me they have purchased a car from Payless, and therefore, I have no opinion about the company other than what I heard from another attorney at the above-described luncheon meeting.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida

Full post as published by Florida Bankruptcy Law on March 20, 2009 (boomark / email).