One of the biggest questions people have about bankruptcy is how it might affect their future ability to purchase items, particularly on credit. One of the specific issues Connecticut filers may wonder about is their ability to buy a car during Chapter 7 bankruptcy. The answer to this question is not always straightforward, as there is a difference between being able to buy a car and it being a good idea.
The Chapter 7 bankruptcy process typically lasts three to six months. During this process, filers must list their assets for the courts. Nonexempt assets must be sold under this type of bankruptcy, with proceeds going to creditors. A vehicle may be exempt from this provided it falls under the vehicle exemption amount set out under Connecticut law.
Those who are looking to buy a vehicle on credit during a Chapter 7 bankruptcy will likely find it difficult to locate a lender willing to take on such a risky situation. If it does become possible to find such a lender, filers should be aware of limitations that exist within their bankruptcy proceedings. They should also be aware that any lender willing to take such a risk will likely have terms that are much pricier than another lender.
In most cases, it is best for prospective car owners in Connecticut to purchase a vehicle following the completion of their Chapter 7 bankruptcy filing, rather than seeking to lease or buy a vehicle during the process. While few lenders will take on a client who is undergoing bankruptcy, many are willing to work with those who have this mark on their credit report. Those wondering about the legal implications of buying or selling a vehicle during bankruptcy should contact a lawyer for more information.