Can bankruptcy help me with a title loan?
Chapter 13 Bankruptcy can help you pay off your car title loan with a much lower monthly payment. Through a chapter 13 bankruptcy case you would pay the loan back at a greatly reduced interest rate. As of right now that interest rate is 6.00%. This will make your monthly payment a lot more manageable. Our office files the vast majority of Chapter 13s with NO MONEY DOWN. If you want to know how much your payment would be in a Chapter 13 please call us now at 785-856-8720 to talk an attorney today.
A car title loan is a type of secured loan where borrowers use vehicle title as collateral. These loans are different from the loans you get to purchase a vehicle. Title loans usually have high interest rates (300%, sometimes more) and are intended as short-term loans.
Let’s assume you took out a title loan for $1,000 at 300% APR. On an auto loan of $1,000.00, with an interest rate of 300% for 12 months, your monthly payment is $268.45. At the end of your term, you will have paid $1,000.00 in principal and $2,221.37 in interest for a total payment of $3,221.37.
Most of these loans do not pay back this fast. Instead they set a minimum payment per month which is usually only a few dollars above the monthly interest charge. In other cases the title loans renew monthly. This traps people into a repayment plan that runs years if they make the minimum payment.
If you stop making payments on your title loan, your lender has the right to repossess your vehicle. Title loan companies do not need a court order to recover a vehicle from you if you have missed your car payments. If your vehicle has been repossessed by a Title Loan Company, you must act quickly to get the vehicle back. Call our office 785-856-8720 to talk to one of our attorneys today or to set up a FREE appointment.
Your rights and obligations when it comes to repossessions and deficiencies can be confusing, contact a bankruptcy attorney to explore all your options.