Car payments can be some of the highest monthly payments, depending on the type of car and where the car was purchased. Affording a high monthly car payment at first may not be an issue, but when other financial issues arise, many people find themselves stuck. You may have options if this happens to you. Talking to a Tullahoma bankruptcy lawyer is one of those options.
I Cannot Afford My Car Payment
Dealing with and managing car debt can be stressful. Unexpected financial crises can strike, leaving you unable to afford your next car payment. The first step when you cannot afford a car payment is to call your auto loan lender. Explain your financial situation or change in circumstances.
In some cases, a loan lender may work with you to delay or lower your next monthly payment. This might be a temporary measure until your financial crisis is resolved. Your loan lender may also be able to offer different hardship assistance programs. These come in the form of forbearance, deferral, and refinancing.
Deferrals will allow you to delay your next car payments for a certain number of months. However, the interest rate will still continue to add to your total principal balance on the car during those months. Late-fee waivers may also be available. This happens when the lender agrees not to charge a late fee for a late payment.
When it comes to refinancing a loan, this involves requesting more time to pay the loan with a lower interest rate and lower monthly payment. The obstacle here is your credit score. To request a lower interest rate, your credit score will need to be at a certain level. The other downsides are:
Paying more money for your car in the long run
Risking a lower credit score if these payments are missed or late
An option that is often thought of as a last resort is to sell your car. You can use the money to buy a more affordable vehicle or to pay off other debt. The main obstacle is the waiting time.
Prevent Car Payment Problems
There are also tips for preventing car payment problems like budgeting and financial planning. The first step is to set a limit for how much you know you can afford for a new car. Do not forget to factor in every cost, especially when buying from a dealership.
Extra costs from state taxes, title fees, dealer costs, warranty fees, and auto insurance changes can all add up. Before you know it, the original price tag has gone up significantly in price. If you own a car currently, consider whether you would like to trade in this car to lower the price of your new vehicle purchase.
Contact Tom Bible Law Today
You may have options when you cannot afford your car payment. Feel free to call us at Tom Bible Law today at (423) 424-3116 for a consultation about your financial dilemma. Our legal team of Tennessee bankruptcy attorneys is ready to help you explore various options for bankruptcy. We can be found in the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.