Can I Use Credit While In Chapter 13 Bankruptcy?
By Bankruptcy Attorney on Feb 12, 2007 in Chapter 13 Bankruptcy
In Chapter 13 bankruptcy you will receive offers for credit after you file your case. Some of the offers for credit, especially for cars and houses, will require that you get permission from the Chapter 13 Trustee, who oversees your case.
You may need permission from the Chapter 13 Trustee, because taking on debt while in Chapter 13 bankruptcy will eat away at the income you are supposed to be paying the Creditors you already have in your payment plan.
In order to receive a loan while in Chapter 13 bankruptcy you may be required to submit an Application to Incur New Debt. This application often requires your attorney to review the application, determine how the new debt would change the budget you have already sent to the Court, and possibly require you to modify your payment plan due to the changed circumstances. These applications are not easily granted; however, if the new debt refinances an older more expensive debt then it is in your Creditors best interest to allow the refinance.
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