Can I ask on a credit application if a potential customer is currently in Bankruptcy Chapter 13? We are a small used car lot that does in house financing, so we don’t do formal credit checks.
We had a customer in the past who was not forthcoming about being in bankruptcy. I know they can’t "incur additional debt" without a court order. But is it acceptable to ask up front if they are in bankruptcy?
Yes, you can and should.
Technically, you missed the important exception to the "no new debt" rule.
…without the permission of the court.
People are buying/selling cars while in these plans all the time.
Some smaller lots like yours target them as clients.
