Arizona Bankruptcy Lawyer Blog

One issue which comes up periodically when contemplating the filing of a bankruptcy is whether to purchase a new car prior to filing the case. Most chapter 7 debtors say that they need to purchase a car before the filing of the bankruptcy because they feel their credit will not allow them to purchase a car after the discharge. Most chapter 13 debtors say that they need a new car now, so they can survive the five year chapter 13. Generally, our experience has been that chapter 11 debtors rarely express these concerns. In each case the debtor intends to pay for the vehicle and retain it. There is an Arizona statute, A.R.S. § 28-2133 which provides for the procedures relating to the recordation of a lien on a vehicle title. Essentially, what the statute means is that a creditor must perfect its security interest within 30 days of a new buyer taking possession of a vehicle, or the security interest may be set aside. The full text of the statute is as follows:

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