Bankruptcy “reform” in 2005 tried in a number of ways to discredit and gag lawyers from helping debtors.
One of those additions to the Bankruptcy Code prohibits lawyers from advising those filing bankruptcy from incurring new debt. The statute makes no distinction about the kind of debt involved or the purpose served by the loan.
Lawyers are not to advise incurring new debt.
But I’m not your lawyer, so I can tell you what you need to know about cars. Or really about car loans, since I know nothing about cars beyond that.
Cars and the means test
The IRS standards, on which the means test is based, allowed a debtor deduct a certain amount per month to acquire a car. Courts were split on whether you had to have a car payment to get the ownership allowance.
Then the Supreme Court in Ransom said the debtor with a paid for car gets no ownership deduction. But if you have some remaining payments on a car loan, you get to claim the full car ownership deduction of $517 here in California on the means test.