If you are thinking about filing for bankruptcy, you will want to make sure that you don't have a car title loan balance. Why do car title loans and bankruptcy not get along?Any time you file for bankruptcy, the debt which you owe will be entered into the court for a judgment. The judge will need to approve your application (prepared by a lawyer) and all debt listed will wither be thrown out from filing Chapter 7 or reorganize payments in Chapter 13.
Secured loans are not included in bankruptcies. Anytime you sign for a secured loan, you will use some sort of property as collateral to support the payoff if the loan does not get paid off. Bankruptcy cannot help you with a car title loan. If you do not pay your loan off, the collateral will do it for you. The loan agreement will then be settled. There is nothing in the bankruptcy court process that can change the terms of the secured car title loan.
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The car title loan company will allow you the use of your vehicle while the loan is being paid for. Make your payments and keep communication open if you think you may be late. So why use a car title loan? Well, for starters, they offer fast access to cash. The loan application and approval could take as little as an hour. Many people who own the pink slip to their vehicle are pretty excited about getting much needed money that quickly. The idea that you can get a loan out against collateral yet not have to hand over the property is a sweet deal as well. Go to a pawn shop to get some cash out of some jewelry and see if they let you walk away with both. That scenario would not happen.
A secured loan is much easier to obtain than an unsecured loan. You offer the lender the collateral as payment for the loan if you are unable to follow through. The secured lender will hold you to that promise. It is like "prepaying" for your loan. Even though it is an easier way to get approval, you cannot forget the dangers of a car title loan.
*Your loan is expected to be paid in full in 30 days.
*High interest
*The title company owns your pink slip until you pay the loan in full.
*You will potentially lose your car if your loan does not get paid. Car title loans are great for cash. Don't get yourself trapped in big debt or possibly lose your car over it. Have a payoff plan before you sign for the loan. It may be difficult to make the plan work, but it should be your top priority. Any short-term loan will carry a faster payoff and charge you high interest for keeping the loan out longer than initially set.
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