Can You Buy a House or Car After Bankruptcy?

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At Sadek Bankruptcy Law Offices, we realize that every situation is different. Our debt relief lawyers will take the time to learn about your situation and your goals. Our objective is to explain your legal options and offer the best debt relief strategy for you in the most compassionate and friendly manner possible. Call 24/7 to schedule your meeting with a lawyer.


Our office understands the financial stress our clients endure. Therefore, in addition to reasonable legal fees, we offer a payment plan to all of our valued clients to make quality legal services most affordable.


In addition to our primary law office in Center City, Philadelphia, we also have law offices throughout the Greater Philadelphia, Pennsylvania Area and in New Jersey. Our branch offices have contributed to making us the #1 Bankruptcy Filer and debt relief firm in the Greater Philadelphia area. Our goal is to have a convenient location within 20 minutes of where our clients work or reside.

Can You Buy a House or Car After Bankruptcy?

can you buy a house after bankruptcy
The short answer is YES you can!! Since Chapter 7 is a relatively short process and is usually concluded within four months after filing, large purchases such as a vehicle or home do not come up often. However, it should be noted that the purchase of a car or house is possible whether during a Chapter 7 or Chapter 13 Bankruptcy matter.  A Chapter 13 Plan is a reorganization of debt that results in the elimination of interest for credit cards and personal loans and also provides time for the bankruptcy filer(s) to repay delinquencies due and owing on a mortgage, vehicle, or taxes. Since a Chapter 13 Bankruptcy is over three to five years, situations such as job changes, vehicle breakdowns, or accidents lead the bankruptcy filer to want or need to change their housing situation or vehicle. 

Buying a Car in Chapter 13 Bankruptcy

While in Chapter 13 Bankruptcy, it is most simple to change vehicles. Vehicle changes generally stem from needing a different vehicle due to changes in family’s needs or changes in family size, unforeseen repairs, the ability to get a lower payment, or an unfortunate accident that deems a replacement vehicle necessary. The process for obtaining a replacement vehicle is simple, whether your bankruptcy case is filed in Pennsylvania or New Jersey the dealership only needs an authorization letter from the Chapter 13 Trustee approving the purchase of the new vehicle. The trustee needs to make sure that the new/replacement vehicle does not cause a financial detriment which would cause a negative impact on the Chapter 13 Plan. Generally speaking, the Chapter 13 trustee approves new payments which are within 10% of the old monthly vehicle payment. Too much of an increase in monthly payments can foreseeably strain a budget and make the ongoing Chapter 13 Plan unaffordable.  If you are in an ongoing Chapter 13 Matter and are desirous of purchasing a new/replacement vehicle you may use the below corresponding Chapter 13 Trustee link or contact our law office for guidance:
  • For Cases that are filed in the Bankruptcy Court for the Eastern District of Pennsylvania and are assigned to Chapter 13 Trustee Kenneth West, click here.
  • For Cases that are filed in the Bankruptcy Court for the Eastern District of Pennsylvania and are assigned to Chapter 13 Trustee Scott Waterman, click here.
  • For Cases that are filed in the Bankruptcy Court for the District of New Jersey and are assigned to Chapter 13 Trustee Isabel Balboa, click here.
  • For Cases that are filed in the Bankruptcy Court for the District of New Jersey and are assigned to Chapter 13 Trustee Albert Russo, click here.
  • For Cases that are filed in the Bankruptcy Court for the District of New Jersey and are assigned to Chapter 13 Trustee Marie-Ann Greenburg, click here.
Although a vehicle purchase only requires an authorization letter, the sale or purchase of real property (house) requires the filing of a Motion with the Court and a hearing for Court Approval. 

Selling or Buying a House After Bankruptcy

In recent years, we saw more of our clients sell their homes than ever. For a variety of reasons including relocation, change in housing needs or to take advantage of the drastic increase in home prices stemming from the pandemic, more Chapter 13 filers opted to sell their homes in recent years. Whether the Chapter 13 matter is filed in Bankruptcy Court for the Eastern District of Pennsylvania or the District of New Jersey, the process of selling a home while in Bankruptcy is the same. The Bankruptcy does not affect the sale process until an Agreement of Sale has been entered into by the home seller and the home buyer. Meaning that Chapter 13 Bankruptcy does not stop a homeowner from choosing a Realtor, listing the subject property for sale, or negotiating terms of the sale such as price.  However, once an Agreement of Sale is reached, then the attorney for the Chapter 13 filer(s) must file a Motion to Sell Real Estate with the Court. The Motion hearing is usually held thirty (30) to forty-five (45) days after the Motion is filed and therefore it is imperative to file the Motion that time is of the essence to obtain a Court Order approving the sale of real estate before the settlement is scheduled to take place. Generally, the Court is looking to make sure that the sale price of the home is sufficient to satisfy all costs of sale, realtor fees, transfer taxes, mortgages, and other liens, but also, to ensure that the sale price is of fair market value and will yield a fair distribution to creditors after all costs of sale and the filer’s exemptions.  In times of low housing prices and/or low-interest rates, there is an increased interest in purchasing a home. Whether a filer of Bankruptcy recently sold real estate or is renting and would like to purchase a property, it is necessary to file what is known as a Motion to Incur Debt. The purpose of the Motion to Incur debt is to ensure that the Bankruptcy filer is incurring a monthly mortgage expense that is substantially similar to what they were paying for their previous home or rent. Where there is a great disparity between the current living cost and desired property our office has argued that the bankruptcy filers will be receiving tax deductions associated with owning real estate that they were not obtaining while renting, or that the bankruptcy filer will be receiving rent from a family member to offset the increase in cost for their new home. A Motion to Incur Debt and subsequent Court Order is a requirement to obtain a mortgage as well. The process to obtain a Court Order is generally thirty (30) to forty-five (45) days and with a settlement looming, like a motion to sell discussed hereinabove, time is of the essence. 

Suggested Waiting Period

Many people I speak with think they will never be able to get a credit card again, let alone purchase a car or home after a Bankruptcy filing. My advice is usually most conservative and I urge clients to wait at least six (6) months after a bankruptcy filing before even shopping for a car and to wait at least one (1) year after a bankruptcy filing before shopping for a home. The Bankruptcy filer’s ability to obtain these big-ticket items at favorable financing terms hinges upon their ability to stay away from new unsecured debt after filing which will allow them to see an increase in credit score and purchasing power. It is our firm’s practice to discuss and counsel our clients regarding the legal process, timing, and financial necessity of the decisions they are making. 

Partners Helping Those in Bankruptcy Purchase a Car or Home

Over the years our office has worked with hundreds of Car Dealerships, Realtors and Mortgage Brokers. Below is a short list of dealerships and people who have helped our clients in the past and looked out for their best interests when purchasing a vehicle and selling or buying a house:

Car Dealerships:

Mortgage Lenders:


How Sadek Bankruptcy Law Offices Can Help

Brad Sadek is the Founding and Managing Partner of Sadek Bankruptcy Law Offices. He has a unique skill set in that he is well-versed both in personal and business bankruptcy matters in Pennsylvania and New Jersey. Brad Sadek has successfully helped over 5,000 individuals and businesses and has decades of experience in Bankruptcy Law. Brad has served as an Expert Witness in Bankruptcy and is often sought after by other lawyers for his legal opinions. If you are considering bankruptcy or debt relief in the Greater Philadelphia area or in New Jersey and would like to speak with Brad Sadek please call 215-545-0008 or 856-890-9003 or use the below link to schedule a meeting. 

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