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What To Do When You Are Upside Down On Automobile Payments

Our firm has been seeing this with clients an increasing amount over the last few years. It is not unusual to see situations where the owner is $5,000 to $8,000 upside down (or underwater) on their cars and trucks.
If you have owned your vehicle for over 2 1/2 years, a chapter 13 bankruptcy may help you a great deal. In a chapter 13, you only pay the value of the car, not the debt.  Additionally, you can extend the payment time and lower the interest rate. 
As an example, let's say that you initially finance a car for $24,000 at 12% over 60 months with a payment of $534.00 per month. After 30 months you still owe $13,788 but the car may be worth only $8,785.   In a Chapter 13 you can restructure the debt to the $8,785 at 4% with a payment of $161.84 per month.  YOU SAVE $378.16 PER MONTH!!!!
What I tell my clients is this: part of starting your financial life over is strategizing. If you strategize well, you don't have to work so hard to pay off your debt. Not only that, you can normally get rid of credit card, medical and loan debt. Instead of scrounging around and collecting change to pay off your debt monthly, you free yourself from having to scrape and you offer yourself a new opportunity you otherwise didn't have.
Think of what you can do for your family with the additional cash flow each month.  Hundreds of extra dollars in you pocket. You can have a life again. Give us a call and we'll look at your situation.
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