What if I want to buy or sell something while in bankruptcy?
There is a common misperception that debtors cannot purchase or sell any property while in a chapter 13 bankruptcy. That simply is not the case. However, you will need permission from the court to complete any purchase or sale.
Should you find that you would like to sell or purchase an item, for example a house or vehicle, you should contact your attorney right away. Your attorney will need some information from you. This information will include the selling price, financing terms, the length of the agreement and so forth. Basically, you should provide the proposed contract terms to your attorney.
Your attorney will then prepare a motion to either sell or purchase, whatever is appropriate, and file the motion with the court. That motion will have to be set for a hearing a minimum of 21 days from the day of filing. That 21 day period allows all of your creditors and the trustee to receive notice and allows time for any objections. If there is an objection all may not be lost. It may be an objection that you and your attorney can cure. If the objection holds you may not be able to buy or sell the property.
If there is no objection within the 21 day time frame, a judge will likely grant your motion. At that point, your attorney can submit an order to the judge. The judge will need to sign this, and only after there is a signed order can you sell or purchase the property.
If you intend to purchase something, like a car, the motion can be written to cover any comparable vehicle up to a an established debt limit in the event that a particular car you were in interested in is no longer available after this process has been completed. It is also important to know that must be able to demonstrate that you can actually afford the purchase.
As you can see, this can take some time to complete so you should speak to your attorney about the process as soon as possible if you are interesting in making a purchase or selling an item while in a chapter 13 bankruptcy.
If you have questions about this, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney today.