Avoiding Bankruptcy and Repossession
If you are thinking about declaring bankruptcy, take some time to consider your entire debt. Consider all your options. Talk to the experts on the subject. Weight the options to determine if bankruptcy is the most appropriate choice. It could be that your situation would be handled better using a different solution. When possible, it is important to think about avoiding bankruptcy and repossession.
When unemployment is creating the problem, your creditors will often lower your payments. It is wise to stay in constant contact with them. Communication is key when you are struggling financially. Let your creditors know what your situation is and how you are working to improve it so that you can pay your debt. Be sure that they have current contact information and check in with them often.
A creditor would rather have some form of payment rather than nothing. Talk with them and discuss what’s happening with your employment or non-employment. They should be able to create a payment plan that will work until you are back on your feet. Once you are gainfully employed again, you can then resume your normal payment.
In the case of a purchased vehicle, most people are upside down in the beginning of the loan. Unless you have owned a vehicle for a long time or put down a large deposit, it is common to owe more than the value of the car. You could attempt to sell the vehicle and pay off part of the loan. This would lower your debt, but you would then be without a vehicle. It would be up to you to determine if this would be your best solution.
In the event that you owe more on your car than it is worth, consider that you will still owe money to the lender after the sale of the vehicle. Before they would be willing to release the title, a new loan would then be created for the balance due. Although this could still be a good option is it should result in a much smaller payment.
If your lender is not willing to work with you, bankruptcy might be your only way out. Again communication with your lender is paramount in this situation. Keep the lines of communication open and move slowly before making your decision.
For additional hints and tips about when and why you should declare bankruptcy, contact the southern California bankruptcy lawyers at Westgate Law.