Can I buy a new car before filing Chapter 13?

In bankruptcy, the 90 day period prior to the date of filing is treacherous for incurring new debt because the law presumes that within that period you are insolvent. The most important thing in Chapter 13 is making sure that the title vests and is properly recorded. The bankruptcy trustee can avoid the lien within this 90 day period and you would not have enough equity in the vehicle to keep it as exempt.

I often recommend that my prospective clients purchase & finance a vehicle before filing bankruptcy, especially a Chapter 13. Everyone understands that in order to keep the vehicle they have to pay for it, so there is no material issue or concern that the debt would not be eligible to be discharged. Having a vehicle that is financed is a significant deduction on both the Means Test and to the budget. As a practical matter, if you don't have a reliable vehicle, you may not be able to keep a job that will allow you to complete the Chapter 13. While each state has limitations on the value of the property that is exempt, in a Chapter 13, you retain all your property regardless of whether it is exempt or not. But as a practical matter, few cars that are financed have any equity whatsoever. Hope this perspective helps!

If you need a car I recommend you do purchase it prior to filing the chapter 13. If it is purchased within 90 days of filing the creditor could object to cramming down the interest rate in the plan so be prepared to continue to pay your original interest rate. The courts understand transportation is a necessary expense and purchasing the car within the 90 days prior to filing shouldn't be a problem so long as the car creditor does perfect their lien.