Question:
Dear Steve,
I took a loan from Title Max, and I’ve been paying the interest with $308 every month for almost six months. My vehicle is now messed up, and I’ve had it fixed, but the mechanic informed me about all the multiple problems aside from my main problem & how I do need a new vehicle.
After a couple of weeks, my car completely shut down. I’ve made three payments to Title Max since my vehicle has stopped working, and I’m in a significant bind with even being able to get a new car.
I’m only 22, in school, work full time, and have a 1-year-old daughter. I tried speaking to the general manager, and he said that I still need to pay and they can’t repossess a car that is not running.
How am I able to get out of my loan? First, I need to ensure I can continue getting around, especially being a mom and getting to work. I am stagnant and unable to make significant moves because title max is on my neck. I want to get out of this bind.
Miranda
Answer:
Dear Miranda,
A title loan requires people to pledge their vehicle as collateral to secure the loan.
There is no requirement I’m aware of for Title Max to repossess your car. However, given the clouded title situation, the logical approach would be to consider bankruptcy to eliminate your debt and hope for a reasonable resolution on the title loan.
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You can file a Chapter 7 bankruptcy and eliminate all your debt in about 120 days. However, while the bankruptcy will kill the need to repay the title loan, you will still be left with a lien on the title you would have to satisfy to sell the car.
However, your bankruptcy attorney can advise you on how your district typically handles title loans in bankruptcy.
If the bankruptcy eliminates the obligation to repay the title loan and the car is a pile of junk and Title Max does not want it, consider donating it to a local fire department to tear it apart and use for rescue training.
The debt will be gone, and so will the car.
Ultimately, the best way to deal with title loans is never to get one.
Regarding getting a new car, you’ll have to do the same thing we have all done with a bad financial situation and needing wheels, buy a cheap car just to get you back and forth. This might be from a Buy Here, Pay Here lot or something exceedingly beat for cash.
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