If you are two months behind, your car is probably on a repo list. This means they are looking to repo your car! Without warning. They don’t tell you they are looking for your car. In fact they may even lie to you and tell you everything is fine! Hide the car. Get your personal belongings out of the car now! They will likely steal anything you have in the car! And figure out what you want to do about it! Is the car even worth keeping? How soon can you start making payments again? You must be brutally honest with yourself. Is the car insured? Can you afford the car payment and the full coverage insurance you are required to keep on it?
Option 1:
Talk to the finance company, and see if they will agree to tack on the payments to the end of the loan. Often, if you have had the car for over a year, and have a decent history of making the payments on time, and you owe one of the large banks or finance companies, they will agree to let you tack on a couple of payments to the end of the loan. But they will likely insist that you at least pay the interest due on the payments you owe. So this might not be enough help.
Option 2:
Let the car go. Let them repo it, and if you are eligible you can file a Chapter 7 and wipe out any balance you will still owe on the car after the finance company sells it. Remember, even if you voluntarily surrender the car, they get to charge you fees, and sell the car and can come after you for the balance still owed under the terms of your original contract with them.
Option 3:
If the car is worth keeping, you can file a chapter 13 type bankruptcy and force them into a repayment plan. If you purchased the car more than 2.5 years ago, a chapter 13 can force them into a payment plan paying the current market value of the car rather than the payoff, and very often lower the interest rate you are paying on the car note. Plus it can consolidate all your other debts, which ideally will make the car easier to afford.
Option 4:
If you have lots of other debt that can be wiped out, and you are eligible for a chapter 7, AND you can catch up the payments soon, like within a couple of months, you might want to consider a chapter 7 type bankruptcy.
Option 5:
Especially if the car is a late model car, and it is worth much less than the payoff of the car. You might be eligible for a REDEMPTION using Chapter 7 of the bankruptcy laws. Redemption can work great if the car is worth less than the payoff, and is not a very old car. You can use www.722redemption.com to refinance the car for the current market value of the car, and hopefully lower your car payment substantially. It is definitely worth thinking about. Or maybe you can use your 401k savings to pay the car off for the current market value of the car.
Talk to an experienced bankruptcy lawyer BEFORE you withdraw any funds from your 401k or borrow from your 401k. Timing of this option is very important!
