Like many of your friends and family members, you need a car to navigate daily life. After all, you probably drive to work, the grocery store, entertainment venues and other places. As you know, though, car payments can be almost unbelievably expensive. Even leases can set you back hundreds of dollars every month.
Not counting mortgages, the average American has almost $38,000 in outstanding debt. This debt comes from many places, including credit card balances, medical expenses and student loans. For many Alabamans, a car loan or lease also adds to the overall balance due to creditors. While there are many types of bankruptcy and no single debt solution is right for everyone, using bankruptcy protection to help you manage your auto loan or lease may be a good option. Here are three potential car-related benefits from a bankruptcy filing.
- Address repossession
If you are behind on your car payment, you may constantly look through your blinds to see if a tow truck has arrived to repossess your vehicle. A bankruptcy filing may stop repossession efforts. Further, depending on your situation, you may be able to regain possession of a recently repossessed car, truck or SUV after your bankruptcy filing.
- Lower car payments
Your car payment may account for a significant chunk of your monthly expenditures. If you have had your car loan for more than two years, your bankruptcy filing may allow you to lower your car payments. You may even be able to reduce the total loan amount you owe to the financing company.
- Surrender your lease
Leasing a vehicle is often a good way to drive a nicer car without having to secure financing for an automobile purchase. Still, leases can be expensive. If your lease is burdensome, bankruptcy may offer you a way to surrender it without incurring additional penalties.
As mentioned, there are different types of bankruptcy filings, with each offering different advantages and drawbacks. Still, if you are struggling to pay your auto loan or lease, considering bankruptcy protection may be the right course of action.