By J. Robert Vanhemelrijck
As a bankruptcy attorney here in San Antonio, I often meet with individuals whose car payments are too high. My clients come to me having gone through tough times and end up with more bills than they can pay. As a result, some of them had poor credit and had to pay outrageously high interest rates on their automobile loans. Many borrowers are stuck between a rock and a hard place. They need a car in order to drive to work but the car payment is killing them financially.
I frequently talk with individuals who have car payments that are $300, $400, or even $500 a month. They are pleasantly surprised to learn, that in certain situations, when filing bankruptcy, there are ways to both KEEP your car and REDUCE your payment.
Do you owe more on your car than it is worth?
I have many clients who were previously up-side down in their car loans. The good news is that under certain circumstances I am able to use the U.S. Bankruptcy code to force your car lender to reduce the loan amount down to the fair market value of the car. And the other good news is that the value is NOT determined by the car lender, but instead is determined by the U.S. Federal Bankruptcy court. If applicable, this alone could reduce the car payment dramatically.
Are you paying a high interest rate on your car loan?
Is your interest rate in the 18% to 30% range on your car loan? Under certain situations, I am able to reduce that rate down to the current fair market interest rate. As a result, some clients are able to save thousands of dollars over the life of their loan and lower their monthly payment to an amount that is affordable.
Do you have a title loan?
A title loan is when your car is paid off but you need money, so you go to a title loan company and they loan you money using your car as collateral. The problem is that title loans are very expensive. Typically, borrowers are paying interest rates that are more than 100% a year! The Federal Bankruptcy Code provides ways for a bankruptcy attorney like me to reduce your title loan payment by lowering the loan balance down to its fair value and reducing the interest rate down to a fair market interest rate. For some clients this could mean reducing a $400/month payment to less than half of that amount!
Can I keep my car?
I understand that having a reliable car is important. If your car payment is too high my goal is to make your car more affordable for you. If you are up-side down in your car or are paying a high interest rate, there may be ways to lower your car payment through filing bankruptcy. If you have questions, please call my office at 210-804-1529.