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car

Car Loan

Having bad credit or no credit at all creates a problem when buying a new or used vehicle. The financing with bad or no credit leads to high interest rates, high car payments, and sometimes having to settle for a car that’s not in great condition. Interest rates for cars range anywhere from 0% to 18% or even higher. I’ve seen interest rates for cars be as high as 28% with payments as high as $700 for 60 months. This creates problems for the new car owner because they become locked in to the high payment for a car that may not last long enough for them to pay the lien off. A car is a necessary tool for our mobile society, it allows you to maintain employment, visit family, and travel conveniently but sometimes the car loan causes more harm than utility.simsbankruptcy

Bankruptcy could be a great option for someone who has gotten into a vehicle payment that they no longer can afford or for a vehicle that has major mechanical issues that they cannot afford. In Chapter 7 or Chapter 13, the debtor can choose to surrender the vehicle and have the debt discharged. This is especially nice for those filing Chapter 7 seeking a fresh start. In a Chapter 13, the debtor may be able to pay the vehicle off at the vehicle fair market value if it was purchased more than 910 days from the date of filing. The Chapter 13 could also help the debtor out with lowering the interest rate on the vehicle.

Voluntary surrender of the vehicle could be an option to get out of a car you can’t afford however this option does have consequences. Typically, the car creditor will sell the vehicle at auction for cents on the dollar and begin collection actions for the balance remaining after the sale. This is called the deficiency balance or the amount left on the installment contract that you signed when you purchased the car. Bankruptcy can still help you wipe out that debt because it now has become an unsecured debt similar to your credit cards.

The best piece of advice I can give you if you’re struggling with your car payment is to contact a local bankruptcy attorney. Even if bankruptcy doesn’t make sense for you or you don’t think it does, consulting with a bankruptcy lawyer will allow you to weigh all of your options instead of continuing to stress and worry.

Post by:

Tyler Sims
Sims Law, PLLC
1202 E. Arapaho Rd, Suite 110
Richardson, TX 75081
469-751-7467
simslawpllc.com
[email protected]

By : First Page Attorney | April 22, 2016 | Uncategorized