Quick Answer: Car title loans can lead to vehicle repossession when borrowers can’t repay, since lenders hold the car title as collateral until the loan is satisfied. Chapter 13 bankruptcy may prevent repossession and allow repayment over five years, making it worth consulting a bankruptcy attorney for a free evaluation.
Question:
Dear Steve,
I am in deep doo-doo, pawned my car title and now I can’t pay cauze I got behind, don’t want my car taken, credit not good, so where do I stand!
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I put my question in the first paragraph, I don’t know how to get out of this spiraling situation!!
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Nancy
Answer:
Dear Nancy,
The obvious answer to putting this behind you is to pay the loan. But I’m assuming that’s just not an option.
Unfortunately, if you took out a title loan and signed the title over to the loan company as collateral, they own the car till you pay off the loan.
You could always attempt to negotiate an affordable repayment plan but I’m sure you’ve already tried that.
Ultimately, the car title lender estimates they will recover the amount of the loan by selling off your vehicle. I’m sympathetic to your situation but that is what you signed up for when you took out the loan.
One option may be to consider Chapter 13 bankruptcy to prevent the repossession of the vehicle and allow you to pay back what you owe over a five year period.
You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.
Determining if the car title is really securing the loan is something the bankruptcy attorney can advise you on when you meet with them.
Update: If your car has already been seized by a title loan company, see the newer step-by-step crisis guide on what to do right after a title loan repossession — it covers redemption rights, personal property, and state-by-state deficiency rules.
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