There is a considerable amount of misinformation commonly attributed to bankruptcy. When an individual in South Carolina files for Chapter 7 bankruptcy, it can be unclear what financial allowances they are afforded during the process. While it may be possible to make larger purchases like a new vehicle during the filing, it may not be in the best interest of the individual to do so.
Chapter 7 is considered a “liquidation” bankruptcy, in which assets are tallied and then used to pay down creditors. This process generally takes up to half a year, and individuals who file are required by law to report all assets to the bankruptcy trustee. Some assets may be considered exempt from this process, including vehicles that are currently being financed, depending on the laws of the individual’s state of residence.
However, finding finances for new purchases can be difficult during this time. During the Chapter 7 process, many lenders may refuse to work with the debtor, because assets accrued during an open Chapter 7 filing may be subject to liquidation. Loans become much easier to come by once the process is complete, but it will still be important to find lenders willing to work with an individual whose credit has been influenced by a Chapter 7 filing.
This is why it can be so valuable for South Carolina residents considering Chapter 7 to seek out the support of an experienced bankruptcy attorney. The process can be complicated at the best of times, and professional support can go a long way to minimizing those complications. While Chapter 7 bankruptcy can be challenging, the chance to start fresh and debt-free can be well worth it.