Cars are anything but inexpensive these days. Even the cost of a light vehicle, such as a typical sedan or a minivan that many people in the U.S. drive, approaches $40,000 – roughly $8,000 more that the average millennial earns in a year. Many looking for a way to afford a vehicle may look to longer loan terms that can sometimes exceed 6 years, a departure from the standard 4 year commitment of an earlier time.
Although extending loans can drop the monthly payment, there are drawbacks. Consumers not only end up paying more in interest when accepting longer loan terms, they are also on the hook for timely payments on loans ranging anywhere from 72, 84, 90 to even 94 month periods – no small feat in a job market that can have its ups and downs.
The overwhelming advice is for consumers looking to purchase a car is not to buy car beyond their current means even if a longer loan seems to make it affordable. It is also important to shop around for the best interest rate or work on bringing up a credit score to qualify for a better rate even if it means waiting months to buy a car. Skimping on a few bells and whistles, securing a good interest rate, and getting a car paid off sooner than later translates into the security of owning a car free and clear, no worries about coming up with monthly payments.
Great advice for those just starting the process, however, many more are already struggling with car payments on loans with several years left to pay. According to the Federal Reserve, 7 million people are currently 90 days behind on their auto loans, pointing to the financial difficulties many American families face. Those who struggle with a car payment may also have credit card payments, rent or mortgage, medical bills or other financial obligations. Concerns about losing a car to repossession looms large, especially when it is usually the only means to get back and forth to work.
When You Are Behind on Car Payments
Contact an Experienced Bankruptcy Protection Lawyer For Help
If you are in a difficult financial situation, bankruptcy protection might be a good strategy to liquidate unsecured debt in a Chapter 7 bankruptcy so that you can resume regular payments on your vehicle. In cases where consumers do not qualify for chapter 7, they may be able to enter a repayment plan under Chapter 13 which can provide needed relief so that you can meet your financial obligations. The first step is getting information before the lender repossesses your vehicle. Contact Peoria Illinois Chapter 7 & Chapter 13 bankruptcy protection attorney Charles E. Covey to decide if bankruptcy protection can help you keep your vehicle.
