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Debt Issues: Should I Walk Away From My Car Loan?

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Fear of repossession can be a healthy motivator for many car owners no matter how hard they are struggling, just as anxiety over debt issues like losing a home or other material possessions can cause great stress. This is compounded when other bills are piling up and the car or home loan is underwater—meaning that you owe more than the ‘asset’ is worth. What to do then? Having to weigh out such a decision may just add insult to injury as you are already concerned about mounting debt and paying for essentials.

Unless you live in a large city where public transportation is easily accessible and perhaps even the norm, you probably rely on a vehicle for transportation at least once or twice a day—and mainly for work. And even if you work from home and don’t need to commute, there are trips to the grocery store, pharmacy, school, sports events, and more. Just as having a roof over your head is crucial, so are four wheels. So, if push comes to shove—and rather than waiting for a surprise visit from the repo company—what if you just decide to walk away from that car loan altogether?

Before doing anything of the sort, explore your options. You may find that in calling your lender, they are able to work with you. If you have already been in possession of the car for a few years (and this goes for a lease too, most likely) and put have put wear and tear and plenty of miles on it, it may be in the lender’s best interest to renegotiate the terms with you. It may be a pleasant surprise to discover that you have other options aside from just walking away—a choice that is certainly not without consequence as your credit would take a beating, the lender may ask for (and get) a default judgment against you, and you would probably find it challenging to buy a vehicle in the future.

Only you can decide what is best as you weigh out your options regarding a car that may be weighing you down financially, but keep in mind that most likely you will have to buy something else to drive. If you have turned your car in or allowed it to be repossessed, cash may be required for your next vehicle. As you consider how to reorganize your finances and get into better shape for the future, consult with an experienced law firm like Fitzgerald & Campbell, APLC.

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One of our debt protection attorneys can review your case and help you examine all your options, to include perhaps settling your other debts to help make room for the car payment—or bankruptcy, whether filing for Chapter 7 or Chapter 13. Call us today for a free consultation at (844) 431-3851, or email us at info@debtorprotectors.com.

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