@StartingOver2023 wrote:I have been looking online and have found conflicting thoughts on this topic. If one is about to enter a 3 to 5 year repayment plan (mine will likely be set at 60 months, however I hope to finish early), should they purchase a "newer" car to ensure they don't get into trouble with repairs/unreliability during the BK?
Short answer; "Yes!" Emphatically so.
Long answer; when my attorney suggested I buy a new(er) car than my (then) 14 year old Honda Accord I felt it was not ethical for me to do so and I opted to keep the Accord when I filed; bad move. While the car was mechanically sound, the beginnings of rust and other corrosion were starting to take their toll on the car, and by the third year of my Chapter 13, the car needed upwards of $4,000 just to make it road worthy for another year; seemingly all at once the trunk rusted through, the radiator corroded and was heavily leaking, the fuel tank had corroded through and was leaking, as were the fuel lines and the EVAP system; the final straw was when the brake lines had also corroded to the point where I lost the front brakes. In the end I had to scrape my meager savings together and buy a new(er) car, which fortunately worked out well and got me not only to the end of my bankruptcy, but nearly three years beyond.
With the above said, had I been "smart", I would have followed my attorney's advice and bought something like a Toyota Corolla and packaged it with 5-years of maintenance and extended warranties; had I done so, not only would the car have been paid for by the Trustee as a secured loan, but I would have exited my bankruptcy with a fully paid off asset worth at least $10,000. Hind sight being 20/20, I would have come out easily twenty to twenty-five thousand dollars ahead had I bought the Corolla compared to where I ended up.
