new car loan prior to CH7
Posted: Mon Nov 07, 2011 12:36 pm
Dear Larry,
The U.S. Supreme Court answered your question in footnote 6 of Milavetz, Gallop & Milavetz, PA v. U.S., 130 S. Ct. 1324 (2010):
Thus, advice to refinance a mortgage or purchase a reliable car prior to filing because doing so will reduce the debtor's interest rates or improve his ability to repay is not prohibited, as the promise of enhanced financial prospects, rather than the anticipated filing, is the impelling cause. Advice to incur additional debt to buy groceries, pay medical bills, or make other purchases "reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor," 523(a)(2)(C)(ii)(II), is similarly permissible.
Good luck,
Nick
Nicholas Gebelt, Ph.D., J.D.
Certified Bankruptcy Specialist
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