Bankruptcy can help you pay off a title loan at a greatly reduced interest rate and much lower payment. To find out how, read on.
Pay Off A Title Loan
A Title Loan is similar to a payday loan – it’s a short term loan meant to carry someone until their next paycheck. The big difference is that you have to hand over the title to your vehicle in exchange for the money. The sole purpose of a Title Loans is to trap you in a vicious cycle of debt.
Title loans are particularly dangerous for two reasons: 1. the interest rate is extremely high – often upwards of 300 – 400 percent; 2. If you default on your loan you can lose your car. The threat or fear of losing a car is paralyzing. Most people eventually need help to pay off a title loan.
As a bankruptcy attorney, I have had clients who have been paying on their title loans for up to two years without making a dent in what they owe. Often what they have paid exceeds the value of the vehicle. It’s not uncommon to see a $1,500 title loan with a minimum monthly payment in the $300 range which covers just the cost of the interest.
So how can a Chapter 13 Bankruptcy help?
A Chapter 13 Bankruptcy helps in two major ways: 1. You can pay your title loan back at 5% interest; 2. You can pay your title loan back over 3 – 5 years. In a 3 year Chapter 13 Bankruptcy, your $1,500 title loan will cost you around $45/mo – a $250/mo savings. This allows people to have a fighting chance when faced with a title loan, and takes the worry of repossession away.
If you have questions about How To Pay Off A Title Loan, please give us a call at 785-379-3600 for a FREE Consultation over the phone, in person or you can email us now. Chris W. Steffens is a Kansas Licensed Bankruptcy Lawyer
