QUESTION
Question is about an auto loan default and what I can do about it?
Asked on Feb 12th, 2013 on Debtor and Creditor - Pennsylvania
More details to this question:
I was just wondering if there is anything I can do . The loan has already went into default twice. I got in contact with the bank when a letter was sent. Explained that payment in full was not possible nor was a getting another loan to pay off this one due to having a poor credit score. I spoke to the bank again. They had asked what me and my co-signer had come up with and I stated that it was the same as mentioned above. Bank stated that since it's gone into default twice legal action will be taken. I was curious if this will really go to court or will they send this into a collection agency?
1 ANSWER
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Car loan creditors can repossess upon default. For arguably good reasons, car lenders have an easier route for collection than every other creditor. The collateral is always depreciating and could be lost in an accident or stolen at any time. So, they are allowed to simply take the car upon default and that can happen at any time.
One potentially permanent option is a Chapter 13 bankruptcy. That will stop them from taking the car and allow you to pay the whole debt in monthly payments over 5 years. If you cannot afford that, you may not be able to keep the car and a Chapter 7 bankruptcy may be your best option.
I would be happy to advise you on this by phone or e-mail on a free initial basis.
Answered on Feb 14th, 2013 at 8:27 AM