The court sustained the trustee’s objection and told the debtors they could confirm a plan only if they treated their creditors as if they had sold the ES-350 and kept the other two cars. The plan they proposed, which treated their car payments as if they had not purchased the new card, did not “purge the taint of the improper car purchase on the eve of bankruptcy.” The debtors argued that by replacing their current vehicle ownership expense deduction with what they payment would have been if they re-amortized the two car loans that existed before they purchased their new car placed their creditors in the same position that they would have been in had they not improvidently purchased the new car. “While this approach has some appeal, the court cannot accept it…” Perhaps the fact that the judge drove a Ford Focus, and the trustee, a Yugo, had something to do with this decision?

Would there be a difference in Chapter 7, or if the cars were purchased 4 months pre-bankruptcy, probably?

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.