Recently, S&P Global Ratings reported that more Americans are falling behind on car loan payments. This deficiency is the highest rate in more than six years. With more and more competition in the world of car buying, many lenders have lowered their requirements to consumers. This action has caused more delinquencies and defaults by people with struggling credit.
4.85 percent of these borrowers were more than 60 days past due in August, which is the highest level since January 2010. The rate was only 4.14 percent in August 2015. After the mortgage financial crisis a few years ago, mortgage lenders were required by law to verify that applicants could repay their debt, but car lenders have no such requirement. Lenders are often making longer term loans than previously seen to make a sale.
If you are struggling to make your car loan payments, you may find a workable solution through Chapter 13 Bankruptcy. If you qualify, it allows you to pay for your vehicle over a 5 year period at an interest rate of around 5 percent. If you purchased the vehicle more than 910 days prior to filing the bankruptcy, you can propose to pay the value of the vehicle off to the lender through the plan in lieu of the contract price if that is cheaper. If the vehicle was purchased within the 910 days before filing, then you must pay the contract amount. This value price could significantly save you money to pay off the vehicle at a discounted price and still keep the vehicle.
Please contact me so we can discuss your individual situation and see if Chapter 13 would work for you and figure out how much you would be paying for your vehicle in this 5 year plan. Find out today simply by scheduling an appointment and meeting with me for free. Please call me at 281-847-4345 or email me at RKEMSLEY@KEMSLEYLAW.COM to schedule a free consultation.