New data just released by the New York Federal Reserve Bank indicates that over 7 million Americans are at least 90 days past due on their auto loans. That’s a record number — higher even than in the post-recession years of nearly a decade ago.
According to the economists at the New York Fed, the data, which reflects the status of loans at the end of last year “suggests that not all Americans have benefited from the strong labor market….” Not only are there more and larger delinquencies, but Americans’ cumulative auto loan debt rose some $584 billion — more than at any time in the nearly two decades that the New York Fed has been tracking it.
An auto loan may not be the largest source of an individual’s or family’s debt. However, it can certainly contribute to their financial burden — particularly if they become delinquent.
Most people — unless they live and work in urban centers like Manhattan — need their cars. The fear of losing their vehicle keeps some people from filing for bankruptcy, even though bankruptcy can sometimes be the best way to get out from under crushing debt.
However, many people are able to keep their car, even if they file for Chapter 7 bankruptcy. Vehicles are often included in exempted property along with things like furniture and clothing. Further, creditors often have little to gain financially by repossessing a vehicle.
In fact, if it’s done right, filing for bankruptcy can actually help you prevent your car from being repossessed. An experienced bankruptcy attorney can provide valuable information based on your specific circumstances.