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SUBPRIME AUTO LENDING BUBBLE ABOUT TO POP?
A recent New York Times article looked at the rising percentage of auto loan delinquencies in the “sub-prime” auto lending marketplace. The article can be found here:
This article combined with a recent USA Today story regarding subprime delinquencies in auto loans paints a grim picture of what may happen with any slow down in the economy or change in expenses for the average subprime consumer.
http://www.usatoday.com/story/money/cars/2016/08/26/delinquencies-rise-risker-auto-loans/89389096/
Some interesting statistics from both articles:
- 60 day delinquencies reached 4.59% in July on Subprime auto loans;
- 90 day delinquencies reached 2% in September;
- That is near the historical high of 2.4% from 2009 in the middle of a recession;
What remains to be seen, is whether the economy will continue to remain strong and the job market stable heading into 2017. If the job market falters or 22 million people lose access to health coverage, with the exposure to crushing medical costs, then the subprime default rate may rise over the historical high from 2009.
Bankruptcy can offer many solutions to subprime auto defaults. Chapter 13 allows for a retention of your vehicle with a lowering of the interest rate over a five (5) year repayment period in most cases. Your car may even qualify for a reduction in principal in certain circumstances. Chapter 7 allows for a surrender of the vehicle with no deficiency after the surrender – goodbye underwater car. We work with local dealers to qualify you for a new vehicle loan, either immediately after filing or after discharge.
If your family is still experiencing financial trouble even after the recovery, give our office a call. We have affordable bankruptcy programs designed to help your debt problems. We will counsel you on the potential long term credit benefits of filing bankruptcy in order to help you make wise choices.
At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 or bkmickler@planlaw.com
Bryan K. Mickler
