Archive for January, 2017

What About Your Huge Car Loan?

Saturday, January 21st, 2017

You probably don’t think about bankruptcy when you think about your car loan. But you may owe a lot more than your car is worth. Here are some things to consider. (refer Bankruptcy Network).

car keys

There are several reasons why you may get upside down with your loan. First, the average term of car loans is getting longer – Experian reports that the average loan now lasts between 68 and 72 months. Further, the average loan now amounts to around $30,000.

Second, vehicles are what as known as depreciating assets – they lose value every year and with every mile driven.

When you do the math, you won’t break even on a $30,000 loan financed over 72 months at a 4% until year 3 or 4 of the loan. As the interest rate goes up, it may be year 5 or even year 6 before your loan balance falls below the vehicle value.

If you trade in your underwater vehicle for a replacement (or if you have to replace a damaged or destroyed car) when the loan balance exceeds the fair market value, the replacement lender will reduce the unpaid balance by the wholesale value of the original car and “roll in” the remaining balance into a new loan.

You may end up with Mercedes sized payments but a modest Chevrolet in your driveway.

What Can You Do if You are Upside Down in Your Car Loan?

If you find yourself owing substantially more to your car lender than your vehicle is worth, you do have options. First, you need to look at this problem in financial terms. For example, if you owe $30,000 on a vehicle worth only $15,000 today, you effectively have $15,000 unsecured debt, just as if you had a $15,000 unsecured credit card debt.

If you add up all of your unsecured liabilities and you owe $20,000 or $30,000, it would not be unwise to look at bankruptcy options to get yourself back on track. Chapter 7, if you qualify, would allow you to just walk away from your upside down car loan and start over.

Chapter 13 can allow you to restructure your out of control car loan, along with all of your other debts. If your car loan is more than 910 days old (2 ½ years), you have even more options in that you can “cram down” your outstanding debt to equal the fair market value of your vehicle.

Underwater Car Loans May Represent a New Financial Bubble

Financial analysts are reporting an increase in the number of vehicle loan delinquencies. I expect this trend to increase in 2017 as interest rates begin to rise. Higher interest rates on new loans will leave struggling families with less disposable income.

If your car or truck loan is eating up an large chunk of your take home pay then seek legal advice from a bankruptcy lawyer before you end up in default status or with your vehicle repossessed. Bankruptcy lawyers are always able to offer more options before a crisis starts than if you are staring down an emergency deadline.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Repairing Your Credit After Bankruptcy

Tuesday, January 10th, 2017

So, you’ve done that hard part. You filed for bankruptcy and you have moved on. Now, you can start building a new credit reputation to will pay dividends in the future.


Here are some tips to improve your credit score after bankruptcy from Fresh Start Today:
◾Carefully check your credit report. It is important to make sure that there are no mistakes in your credit reports. Then, you should continue to check it every six months or so. You will notice, as time goes by, that your bankruptcy items will start to fall off. If not, make sure that you follow through with any mistakes.

◾If you notice any mistakes, deal with the credit company in writing. You should always send your information by certified mail and include your name, social security number, address, and date of birth. Don’t forget to include the information that is wrong. Make sure that you follow-through with your case, until it gets settled.

◾Work hard to remove debt from your credit report. If you settle a debt and get it removed from your credit report, you will see an improvement in your score so it is very important to take care of all of your debts. Be sure to look closely through your credit reports and see if there is anything that you can do to make amends and fix any mistakes. It could make a big difference!

◾Apply for several secured credit cards. Secured credit cards are designed to help you rebuild your credit. They work completely differently than a traditional credit card. You put money down as a deposit and then use them like debit cards. The more money that you are able to put down as a deposit, then the more money that shows you have as a “line of credit.” This will also help gradually increase your credit score.

◾Once you have secured several credit cards, it is important that you use them wisely. Now that you have been able to get a few credit cards, you need to use them to be able to rebuild your credit. Use them several times a month, even for small purchases. However, it is very important that you are able to pay off your balance every month! Otherwise, your credit could take a turn in the wrong direction.

◾Pay off your remaining debts on time. You should also pay more than the minimum amount (if possible) to show that you can be responsible with credit. This will help improve your credit score because they will report back to the credit reporting agencies that you are paying off your debt on time and responsibly. The faster you pay off your debt, the better your score will be.

◾Know your limits. After emerging from bankruptcy, you don’t want to fall into old habits. Use your new credit cards sparingly to build up your credit. If you can’t pay off your balance at the end of the month, don’t buy it! If you have to, cut up some of your credit cards – that is much better than closing your accounts.

It can be hard to rebuild your credit after declaring bankruptcy but it is possible. Trust us, many have done it! However, you’ll need to put in the work. With the help of these tips, you should be on the road to rebuilding your credit in no time.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.