There may be new evidence that a strong job market does not necessarily lead to financial freedom for individuals. Over 7 million Americans are at least 90 days behind on their car payment. A car is a necessity for most people and the idea of losing it to repossession is enough to keep them awake at night. What can these individuals do to get back on track?
Who Is Struggling with Car Payments?
According to a recent article in the Washington Post, the majority of the people that are 3 months behind on their payments are under the age of 30. They have low credit scores and they are finding it difficult to pay their monthly student loan bills. A large portion of these borrowers are “subprime” meaning their credit score is under 620. Most of the borrowers that are more than 90 days late on their payments received their loans from a “car finance” company as opposed to a traditional credit union or bank. Less than 1% of borrowers from credit unions are 90 days late on payments.
What Are Your Options If You Are Missing Car Payments?
You could just pay off the balance and late fees, but most people that are behind on payments cannot afford to pay multiple payments at once to get back on track. Another route would be to put the payments on credit cards or take out a personal loan. Beware! Those options often come with higher interest rates than an auto loan even with late fees.
If you are over 90 days late on auto loan payments, bankruptcy could be your best option.
Vehicle Redemption Through Chapter 7 Bankruptcy
Filing for chapter 7 personal bankruptcy may sound like a scary answer to an already stressful problem, but it can be the perfect tool for the situation. It is a common misconception that people must relinquish their vehicle during bankruptcy. However, chapter 7 allows individuals to redeem their vehicles if:
- You can prove your car’s value and come to an agreement with the lender on the value;
- You can pay a one-time lump sum in the amount of the vehicle’s fair market value.
If you cannot afford to pay the lump sum, there are companies that will help you cover it such as 722 redemption.
If you are one of the 7 million Americans that are 90 days late on their car loan payments, you need help. If you want to stop the harassing phone calls and you are tired of living in fear of repossession, contact Elias Dsouza today. Elias has the skills and experience necessary to get you back on your feet.